FRANKFURT—U. S. regulators are yet again set to block a takeover of a European technology company by a Chinese buyer, a further sign of how China Inc.’s recent shopping binge is raising security concerns in the Western world.

German technology firm Aixtron SE late Friday said it was informed by the powerful Committee on Foreign Investment in the U.S., or CFIUS, about “unresolved U.S. national security concerns regarding the proposed transaction.”

The news comes after Germany’s economics ministry late last month withdrew its earlier approval and reopened a review of the €670 million ($710 million) acquisition of Aixtron by Grand Chip Investment GmbH, the German unit of China’s Fujian Grand Chip Investment Fund LP.

Aixtron, a chip-equipment manufacturer, said CFIUS recommended the parties “abandon the entire transaction” and that the authority plans to recommend that U.S. President Barack Obama block the transaction because there are no possible remedies to mitigate concerns.

People familiar with the work of CFIUS suspect that a new, highly efficient semiconductor technology based on gallium nitride, or GaN, could have been the stumbling block for the Aixtron deal.