The UK Government has ordered a China-registered firm to sell its majority stake in a Scottish semiconductor maker for national security reasons.
Feite Holdings, a division of Beijing Jianguang Asset Management, acquired an 80.2 per cent stake in Glasgow-based Future Technology Devices International (FTDI) for $414million in February 2022.
Founded in 1992 by Fred Dart, FTDI is a manufacturer of Universal Serial Bus (USB) technology, such as cables and peripheral chips that help connect old electrical products to modern computers.
Demand: The UK Government has ordered a Chinese-registered firm to sell its majority stake in a Scottish semiconductor maker for national security reasons
It has research and development sites in Glasgow and Singapore, as well as regional and technology support premises in Oregon, USA, and Shanghai, China.
The group’s effective takeover two years ago came just after the National Security and Investment Act 2021 was made law.
This legislation allows the Government to examine and intervene in business deals, like mergers and acquisitions, in the interests of national security.
Following a review, the Chancellor of the Duchy of Lancaster had ordered an entity called FTDI Holding to sell its FTDI stake ‘within a specified period and by following a specified process.’
It said this would reduce the dangers of UK-produced microchip technology and affiliated intellectual property being ‘deployed in ways that are contrary to UK national security.’
The Government also said a sale will protect the firm’s products from ‘being used to pose a risk to critical national infrastructure’.
Since coming into effect, the NSI Act has been invoked numerous times in relation to Chinese-owned companies buying British businesses.
A high-profile example was Nexperia’s purchase of an 86 per cent stake in Newport Wafer Fab, a large semiconductor fabrication plant in Wales.
Nexperia is headquartered in Nijmegen, the Netherlands, but is a subsidiary of Wingtech Technology, a partly state-owned Chinese group.
Following concerns that the deal could seriously impact the UK’s ability to produce microchips, Nexperia ended up selling its stake in the site to American electronics giant Vishay.
Two other deals the Government has blocked include Super Orange’s purchase of Bristol-based electronics designer Pulsic and the licensing of robotic vision technology by the University of Manchester to Beijing Infinite Vision Technology.
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