Government orders China to sell stake in UK chipmaker

The government will force a Chinese tech company to sell its majority stake in a British chipmaker a year after The Times revealed that microchips it had sold to Russia were found in a tank destroyed in Ukraine.
The Cabinet Office issued a “final order” yesterday under the National Security and Investment Act mandating that the Chinese state-owned holding company that acquired an 80.2 per cent stake in FTDI must sell it within a “specified period”.
The order was given on the grounds that it was “necessary and proportionate to mitigate the risk to national security”.
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This was justified on the grounds that the move reduces the risk that “UK-developed semiconductor technology and associated intellectual property” could be “deployed in ways that are contrary to UK national security”.
It also said that Chinese ownership of FTDI might pose a risk to “critical national infrastructure which uses FTDI products”.
The order comes after The Times disclosed how the Scottish-based semiconductor business had sold a majority stake in its business to Beijing Jianguang Asset Management in December 2021, an asset management firm ultimately owned by the Chinese state.
Under its new owners, the company shipped semiconductors worth at least £225,000 to Russia after the country invaded Ukraine.
The company only stopped shipping to its Russian distributor after its bank, HSBC, refused to process payments for the exports, according to an FTDI email seen by The Times.
While the items exported by FTDI were not at the time in breach of UK sanctions, they were part of a list compiled by the European Commission of dual-use goods and advanced technologies that are used in Russian military systems or critical to their development.
At least one FTDI chip was later discovered in a Russian tank in Brovary, outside Kyiv, in March last year, according to researchers at the Yermak-McFaul Expert Group on Russian Sanctions and the Kyiv School of Economics.
At the time, they said that limiting Russia’s access to such items should be a “top priority” for Ukraine’s allies.
FTDI and the Cabinet Office were approached for comment.