Chinese company ordered to sell its stake in Glasgow’s chip industry
- Founded in 1992, FTDI produces Universal Serial Bus (USB) technology
- Feite Holdings acquired an 80.2% stake in FTDI for $414 million in February 2022
The British government has ordered a Chinese-registered company to sell its majority stake in a Scottish semiconductor manufacturer on national security grounds.
Feite Holdings, a division of Beijing Jianguang Asset Management, acquired an 80.2 percent stake in Glasgow-based Future Technology Devices International (FTDI) in February 2022 for $414 million.
Founded in 1992 by Fred Dart, FTDI produces Universal Serial Bus (USB) technology, such as cables and edge chips, that helps connect legacy electrical products to modern computers.
Question: The UK government has ordered a Chinese-registered company to sell its majority stake in a Scottish semiconductor manufacturer on national security grounds
It has research and development sites in Glasgow and Singapore, as well as regional and technology support sites in Oregon, USA, and Shanghai, China.
The effective takeover of the group two years ago came shortly after the National Security and Investment Act 2021 came into effect.
This legislation allows the government to investigate and intervene in business deals, such as mergers and acquisitions, in the interest of national security.
Following an investigation, the Chancellor of the Duchy of Lancaster has ordered an entity called FTDI Holding to sell its stake in FTDI ‘within a specified period and by following a specific process’.
It said this would reduce the dangers of UK-made microchip technology and associated intellectual property being “deployed in ways that are contrary to UK national security”.
The government also said a sale would protect the company’s products from “being used to pose a risk to critical national infrastructure.”
Since the NSI Act came into force, it has been invoked numerous times in relation to Chinese-owned companies purchasing British companies.
A high-profile example was Nexperia’s purchase of an 86 percent stake in Newport Wafer Fab, a major semiconductor factory in Wales.
Nexperia is headquartered in Nijmegen, Netherlands, but is a subsidiary of Wingtech Technology, a Chinese state-owned group.
After concerns that the deal could have serious consequences for Britain’s ability to produce microchips, Nexperia eventually sold its stake in the site to US electronics giant Vishay.
Two other deals the government has blocked include Super Orange’s purchase of Bristol-based electronics designer Pulsic and the University of Manchester’s licensing of robot vision technology to Beijing Infinite Vision Technology.
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