The emotion chip was a big part of Data's character arc in Star Trek: The Next Generation both on TV and in the movies - and as a result, the story of what happened with it in is an important element of the character's story. The emotion chip was created by Data's creator to allow his android to experience human emotions. However, the chip was stolen by his evil brother Lore and Data finally retrieved it when he defeated his brother in TNG season 7, episode 1, "Descent, Part II". However, Data was reluctant to install the chip, finally making the decision to do so in the first TNG movie, Star Trek: Generations.
It makes sense that the resolution of Data's emotion chip arc was saved for the movies, given that they were intended to bring the TNG crew's adventures to a satisfying conclusion. However, the TNG movies failed to tackle the idea of Data experiencing emotions in an interesting way. The best example of Data's emotional state was in "Descent" when he experiences anger, and then pleasure, at killing a Borg drone. Nothing in the show or the movies ever did anything as dark and complex with the idea after that - and indeed, later movies removed the emotion chip altogether.
The History Of Data’s Emotion Chip In TNG
It took 20 years for Dr. Noonien Soong to finish the emotion chip, summoning Data to receive it in TNG season 4, episode 3, "Brothers". Lore also arrived at Soong's laboratory, stealing the chip and murdering his creator. Robbed of the chance to experience human emotions, Data is unable to grieve the death of his father, but eventually confronts Lore in "Descent". During another encounter between Picard's Enterprise and the Borg, Data deactivated and disassembled his brother, but hesitated over installing the emotion chip. In Star Trek: Generations, Data finally decided the time was right to install the emotion chip, but it came with some serious teething issues.
The chip overwhelmed Data's positronic brain, leading to him experiencing erratic emotions during the attack on the space station, putting Geordi's life at risk. By the end of the movie, Data is able to control his emotions and can even turn the chip on and off at will by the time of Star Trek: First Contact. The Borg Queen attempted to use Data's emotion chip against the Enterprise crew, but was unsuccessful, as Data's loyalty to Picard eventually won out. The chip has been removed from Data in Star Trek: Insurrection, though it's unclear how it was removed, or where it ended up.
Why Star Trek Insurrection & Nemesis Ignored Data’s Emotion Chip
Data removed his emotion chip prior to the events of Insurrection, in which he's sent on a covert mission to the planet Ba'ku. It's possible that the android decided it was an unnecessary distraction for the mission ahead of him. Given that Data is disassembled during Insurrection, it's weird that the movie ignored the opportunity to have that taken from him after he discovered the Starfleet conspiracy on Ba'ku. It would have been a fascinating way to give Data added character motivation for joining Picard's uprising against Insurrection's corrupt Starfleet Admiral.
The removal of Data's emotion chip does add a more romantic edge to the android's heroic sacrifice at the end of Star Trek: Nemesis. Data saves everyone when he detonates Shinzon's devastating weapon, killing himself in the process. Picard sees this sacrifice as proof of Data's humanity: "He evolved, he embraced change because he always wanted to be better than he was." This evolution would have less impact if Data's sacrifice was motivated by the emotion chip, rather than the bond he made with his Star Trek: The Next Generation crew mates.