The British government has issued a decisive order forcing a Chinese technology company to divest its majority stake in a UK-based semiconductor manufacturer. This landmark decision follows revelations that the company’s microchips were discovered in Russian military equipment deployed in Ukraine.
Under the National Security and Investment Act, the Cabinet Office delivered a “final order” requiring the Chinese state-owned holding company to sell its 80.2 per cent ownership in FTDI within a specified timeframe. The directive emphasises the necessity to protect national security interests and safeguard critical UK-developed semiconductor technology.
The Scottish-based semiconductor business had previously sold its controlling interest to Beijing Jianguang Asset Management in December 2021, despite growing concerns about authoritarian states’ involvement in strategically vital industries. The sale proceeded with regulatory approvals from both British and Singaporean authorities.
Documents revealed that FTDI, under Chinese ownership, exported semiconductors valued at approximately £225,000 to Russia following the Ukraine invasion. These shipments only ceased when HSBC refused to process related payments. While these exports were not explicitly prohibited by UK sanctions at the time, they were listed by the European Commission as dual-use technologies crucial for Russian military systems.
The situation gained significant attention when researchers from the Yermak-McFaul Expert Group on Russian Sanctions and the Kyiv School of Economics identified an FTDI chip in a Russian tank discovered in Brovary, near Kyiv. This discovery highlighted the urgent need to restrict Russia’s access to such critical components.
The government’s intervention reflects growing concerns about protecting strategic technologies and intellectual property from foreign control. Charlie Parton, a former UK diplomat with extensive China experience, emphasised the systematic nature of Chinese efforts to acquire British technology, calling for increased urgency in implementing protective measures.
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