The UK Government has ordered a Chinese-registered company to sell its stake in a Scottish chip manufacturer citing risks to national security and critical infrastructure.

Future Technology Devices International Holding Ltd, which maintains offices in Beijing and Shanghai, currently holds 80.2% of Glasgow based Future Technology Devices International (FTDI) Limited, but will now be forced to dispose of the stock after the government triggered provisions within the National Security and Investment Act 2021.

The government’s advisory notice said that the action had been precipitated by the Chinese company gaining a controlling interest in FTDI in December 2021, when it acquired more than 75% of the Scottish chip maker.

A final order, published today, made it clear that the government has taken the action to mitigate the risk of UK-developed semiconductor technology being used against the country’s national interests, and to protect critical infrastructure which use FTDI products.

Founded in 1992, the company is a fab-less semiconductor company developing ‘bridge technologies’ to support engineers ,and although headquartered in Glasgow has regional technical support sites in the US and China.

Although there’s no indication of what technology is particularly at risk, the FTDI website contains a host of chip modules and other products which presumably the government doesn’t want falling into hostile hands.

Its products are used across the automotive industry, in medical hardware, and even in consumer products like smartphones, 3D printers and gaming sets. Perhaps more significantly, the company also claims that its chips are used extensively in the communications sector, in everything from data centre servers and optical networks to 5G networks.

That kind of hardware might explain why the government is wary of allowing a foreign company with ties to an increasingly hostile power unfettered access to parts of the country’s comms infrastructure.

Recommended reading

• API and Bot Attacks Cost Businesses £141 Billion A Year 
• China and UK Lead in GenAI Adoption
• NCSC Issues Advisory to Combat China-linked Cyber Threat

China has become increasingly belligerent over the past year, with the UK’s National Cyber Security Centre issuing an advisory notice in September linking another Chinese-based firm to a botnet operation that had compromised thousands of devices around the world, while in March, the government laid the blame for the 2021 cyber-attacks against the Electoral Commission at China’s door, too.

This isn’t the first time the UK has invoked the National Security and Investment (NSI) Act against China, either. 

In 2022, an investigation was opened after the Newport Wafer Fab in South Wales was sold to Nexperia, a Dutch semiconductor firm. Nexperia itself, however, was already owned by a Chinese firm with strong ties to the country’s ruling party.

As in this case, that investigation resulted in the UK flexing its regulatory muscles by forcing the company to be resold to a US-based tech firm instead.