The government has announced its creation of the UK Semiconductor Institute. The new organisation will be tasked with fleshing out the government’s £1bn strategy to grow the UK’s semiconductor industry. The UK Semiconductor Institute will also serve as a meeting point, the government said, for civil servants, academics and private sector executives to discuss the health and direction of the country’s chip industry.
“Building on the early success of the strategy, the UK Semiconductor Institute will unify the semiconductor sector to focus our talented researchers on securing our status at the cutting edge of semiconductor science,” said technology minister Saqib Bhatti. “This is a hugely significant milestone on our journey to becoming a science and tech superpower by 2030.”
UK Semiconductor Institute part of wider government chip drive
In the future, said the government, the institute’s operational independence will increase – the idea being that the organisation will provide UK-based chip researchers with the “tools and infrastructure needed to drive their work forward…and convert their innovation into market-ready products, subject to final checks.” It added that the UK Semiconductor Institute would also boost the specialist skills required to grow the sector in the UK, though it did not specify how this would be accomplished.
The announcement of the new institute builds on the government’s Semiconductor Strategy launched in 2023. That policy drive identified UK-specific strengths in the manufacture of compound chips, in addition to the design of chip architectures. So far, the strategy has resulted in the creation of the ChipStart incubator, an investment of £22mn into two Innovation and Knowledge Centres in Southampton and Bristol and the securing of access to the Chips Joint Undertaking organised as part of the EU’s Horizon Europe initiative.
UK tech industry leaders welcomed the announcement. The new Institute, said EnSilica’s senior independent director Janet Collyer, would “provide a welcome UK focal point of support for semiconductor companies at all stages of their growth” – fundamental, she added, in shortening the transition from lab innovation to product manufacture. TechUK’s CEO Julian David was similarly effusive. “By bringing together government, universities and the private sector,” said David, “the Institute will be pivotal in advancing R&D, skills development, and fostering international collaboration.”
Reception mixed for wider UK semiconductor strategy
The government’s creation of the UK Semiconductor Institute was a key recommendation of a joint report on the health of the country’s chip industry published last month by the Centre for Emerging Technology and Security (CETaS) and The Alan Turing Institute. That report also strongly recommended that the UK double down on its relationship with South Korea to better pair its strengths in chip design with the latter’s manufacturing capabilities. Even so, it said that the UK was highly unlikely to be able to produce the world’s most advanced semiconductors, the manufacture of which is largely monopolised by TSMC and Samsung in East Asia.
Additionally, the UK’s growing compound semiconductor industry remains vulnerable to supply chain shocks emanating from that region – specifically, China, which controls the production of most of the germanium- and gallium-based compounds the industrial niche requires to make its chips in the first place. Furthermore, the Chinese government’s national self-sufficiency drive for semiconductors would likely “involve trying to design out foreign IP, including ARM, a part of the supply chain where the UK has a significant market share.”
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The reception to the UK’s wider semiconductor strategy has been mixed. While some criticised the relatively low levels of subsidies promised by the government compared to the US and the EU, some experts praised DSIT for focusing on targeted investment in the country’s core manufacturing and R&D strengths. “Governments have chosen a costly path with little consideration for second-order effects on consumers and businesses,” said the Takshashila Institution’s Pranay Kotasthane and Stiftung Neue Verantowrtung’s Jan-Peter Klainhans in an opinion piece for Nikkei Asia. “The UK’s strategy of focusing narrowly on certain segments of the supply chain where it has a comparative advantage offers an alternative approach.”
