The UK government has announced up to £1 billion ($1.24 billion) for its semiconductor industry to increase its domestic chip-making capabilities and prevent further disruptions to the supply chain. This move comes in response to the cries for help from bosses at some of the country’s leading firms, who warned of the risk of supply chain disruptions and national security risks.
What is the 20-Year Strategy on Semiconductors?
The investment will form part of a 20-year strategy on semiconductors, which has faced lengthy delays and is set to be published later Friday. The strategy sets out a range of measures aimed at growing the UK’s domestic chip sector, mitigating the risk of supply chain disruptions, and protecting national security. The UK will look to increase cooperation with international partners as part of its strategy.
What Will the Funding Be Used For?
The government will initially invest up to £200 million from 2023 to 2025 before expanding its commitment to up to £1 billion in the next decade. The funding will be used to improve the talent pipeline and access to prototyping, tools, and business support. The government’s aim is to increase the capabilities and resilience of the UK’s world-leading semiconductor industry, which will result in growing the economy, creating new jobs and staying ahead of new technological breakthroughs.
What is the UK’s Approach to Boosting its Semiconductor Industry?
Rather than matching the mega spending commitments of regions like the US and EU, the UK is setting out a different approach that aims to boost the areas it has expertise in. Officials have admitted that it wouldn’t make sense for the UK to build its own massive fabrication plants, such as those operated by Taiwan’s chipmaking giant TSMC for making the most advanced chips. Instead, they are focusing on other parts of the semiconductor industry, such as intellectual property and design and producing non-silicon chips.
The UK government’s £1 billion pledge, although small compared to that of the US and EU, “actually feels like the right kind of number” Britain’s industry needs, according to Scott White, the founder of British chip firm Pragmatic Semiconductor. However, he cautioned that the funding would need to be “applied in the right way.” The UK’s semiconductor industry has faced delays and setbacks due to political instability, and the lack of a coherent microchip strategy was labeled an “act of national self-harm” by lawmakers on the Business, Energy and Industrial Strategy committee.
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