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May 19, 2023

New £1bn UK semiconductor strategy finally unveiled

The government has revealed its plans to help chipmakers with R&D, manufacturing and skills. But is it doing enough?

By Matthew Gooding

The UK government has revealed its long-awaited semiconductor strategy, promising a £1bn investment into the nation’s chip sector over the next ten years, with a focus on Britain’s strengths in design, R&D and compound semiconductors.

The UK’s new semiconductor strategy will see £1bn invested in the industry to help chip manufacturers like Paragraf (photo courtesy Paragraf)

Arriving two years later than planned, the strategy was launched today to coincide with Prime Minister Rishi Sunak’s visit to Japan for the G7 conference of world leaders. As reported by Tech Monitor, the governments of the UK and Japan signed up to the “Hiroshima Accord” on Thursday, promising to work more closely in areas such as semiconductors and cybersecurity.

What’s in the UK semiconductor strategy?

Full details of the strategy have yet to be released – it is expected to be published later today. However, a government announcement highlights several ways it will support industry.

The strategy focuses on the UK’s particular areas of strategic advantage in the semiconductors sector – semiconductor design, cutting-edge compound semiconductors, and the country’s world-leading R&D ecosystem. It will provide a £1bn grant package to back a range of measures designed to secure the UK’s advantage in this globally important sector and meet three key objectives: growing the domestic sector, mitigating the risk of supply chain disruptions and protecting national security.

It is hoped businesses will use any funding available to them to improve the talent pipeline, and that the new investment will make it easier for British firms to access things such as prototyping, tools and business support.

Alongside this, a new UK Semiconductor Advisory Panel will be convened, bringing together key figures from industry, government, and academia to work together to deliver the strategy. The advisory panel will speak on behalf of the sector and provide advice and feedback.

A specialist incubator pilot will also be set up to focus on removing obstacles which hold semiconductor start-ups back from growth. The scheme, launching today, will provide industry with better access to technical resources as well as coaching and networking.

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Sunak said: “Semiconductors underpin the devices we use every day and will be crucial to advancing the technologies of tomorrow.

“Our new strategy focuses our efforts on where our strengths lie, in areas like research and design, so we can build our competitive edge on the global stage.

“By increasing the capabilities and resilience of our world-leading semiconductor industry, we will grow our economy, create new jobs and stay at the forefront of new technological breakthroughs.”

Does the UK semiconductor strategy go far enough?

The UK semiconductor strategy is said by critics to be long overdue, with governments in other parts of the world having launched hefty support packages to try and back their local semiconductor production capabilities in the face of growing competition and to avoid the problems caused by the global chip shortage of 2021. Darren Jones, chair of parliament’s BEIS committee, described the failure to publish the strategy as an “act of national self-harm”.

Elsewhere, President Joe Biden’s regime has put together a subsidy package for US semiconductor companies worth $53bn to support chip R&D and production, while the EU is investing €43bn via the European Chips Act.

China is also spending big to grow its chip industry, and in comparison, a £1bn investment over ten years into what is a notoriously capital-intensive industry may do little to bolster the UK’s standing.

Nevertheless, science innovation and technology secretary Chloe Smith said: “Semiconductors are the beating heart of all electronic devices, from powering our phones and cars to medical equipment and innovative new technologies like quantum and AI which will make a real difference to all of our lives.

“Britain is already a world leader when it comes to researching and designing semiconductor technology – our new strategy will double down on these core strengths to create more skilled jobs, grow our economy, boost our national security and cement the UK’s status as a global science and technology superpower.”

The strategy already has the backing of several leading industry figures. Rene Haas, CEO of UK-based chip design giant Arm, said: “Arm welcomes the UK government’s new semiconductor strategy, which will support the UK’s effort to play a part in global supply chains for next-generation technology. The UK is a significant hub of innovation and talent both for Arm and the wider industry and we look forward to working with the Government and other partners to help make this a reality.”

Read more: India’s semiconductor ambitions are grand. Fulfilling them will take a lot of work.

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