Tsinghua Holdings Ltd., Chinese government owned chip design company, has made a bold $23 billion bid to buy the world’s No. 3 memory chipmaker, Micron Technology, Inc. (NASDAQ:MU)

As part of the deal, Tsinghua has offered an 11.2% premium over Micron’s closing price of $18.89 on Wednesday. If the deal is greenlighted, it would be the largest Chinese takeover of a U.S. firm in history.

The buyout offer stems from a tough year for Micron in which its shares fell by nearly half since the start of the year. Furthermore, the company’s lackluster computer sales paired with its depressing revenue from chip sales has made Micron vulnerable to falling farther behind its competitors. This difficult economic predicament for Micron presents an opportunity for Tsinghua to enter the American chip market while not overpaying for an expensive deal.

Despite numerous reports of the $23 billion bid, a Micron spokesman said the company has not received a buyout offer and declined further comment.

Due to the fact that China has never developed the key technology necessary for data-storing components in memory chips, “[t]hey have decided that they really have to buy somebody because they can’t deliver the intellectual property themselves,” said Handel Jones, who is president of the Silicon Valley consultancy International Business Strategies and has written books on China’s high-tech policy.

However, potentially the biggest roadblock to achieving a goal are U.S. regulators who fear that America would no longer have a substantial role in the production of chips used in many devices such as computers and smartphones. The potential harms to the U.S. economy of selling Micron to China could in affect lead the Committee on Foreign Investment in the U.S. (CFIUS), the panel that reviews foreign acquisitions or investments, to deny the deal.

CFIUS has denied these types of buyouts in the past including in 2008 when Huawei Technologies Co. dropped a bid to buy 3Com as part of a $2.2 billion bid led by Bain Capital. Huawei also faced problems in 2011 when it bought out 3Leaf, a U.S. server technology company, yet omitting to file the acquisition for review with CFIUS; as a result the company was forced to undue the purchase.

These potential issues make the road to a buyout difficult and create a burden for China’s entry into the American chip market.