A Scottish chip company is in the middle of a government intervention focused on national security due to its current Chinese owners.

FTDI – a Glasgow-based fabless semiconductor company focused on USB devices – has found itself at the centre of the court order, which targets FTDI Holding Ltd.

While FTDI Holding is registered as a British company, it is owned by five Chinese partners tied with Jiayin Investment Ltd, an investment company owned by the Chinese state.

After rejecting a plea from the company for an interim relief, the UK government has ordered that the firm sell its 80.2% stake in FTDI, citing national security concerns.

The decision followed a “detailed national security assessment,” the government said, saying that the acquisition of more than 75% of FTDI holdings triggered concerns under the National Security and Investment Act back in 2021.

Specifically, the potential for a transfer of UK-developed semiconductor design, technology, and intellectual property to China, and the FTDI’s ownership could be used to risk critical national infrastructure, was cited as national security concerns.

The Chancellor of the Duchy of Lancaster, which issued the decision “considered that the Final Order is necessary and proportionate to mitigate the risk to national security.”

The chip company, founded in 1992, has headquarters and research and development facilities in Glasgow, as well as Singapore. It also hosts regional sales and tech support in Glasgow, the US, and China.

The move is the UK government’s latest effort to protect the country’s semiconductor infrastructure from foreign entities and potential adversaries.

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The National Security and Infrastructure Act was previously used by the government to separate the Newport Wafer Fab, the UK’s largest semiconductor manufacturing facility, from its Chinese owner. Following this, the company was later sold to US-based Vishay Intertechnology.

Another semiconductor factory was recently acquired by the Ministry of Defence after it faced closure following Apple’s decision to drop business with the firm.

The move comes just as techUK, the trade body, has issued a warning that the UK is falling behind in the global semiconductor industry, despite introducing a National Semiconductor Strategy in 2023.