Britain launched a $1.2 billion semiconductor scheme after the United States and European Union boasted about the chips

  • The investment will form part of a 20-year semiconductor strategy – which has faced long delays – that outlines the UK’s plan to secure its supply of chips.
  • The government will initially invest up to £200m from 2023 to 2025 before expanding its commitments to up to £1bn in the next decade.
  • British investment pales in comparison to the massive spending commitments made by the United States and the European Union.

UK semiconductor chiefs have expressed frustration at the lack of concrete strategy from the government on semiconductors.

Mailsonpignata/500px | 500px | Getty Images

LONDON – The United Kingdom on Friday announced support of up to 1 billion pounds ($1.24 billion) for the semiconductor industry, in a bid to boost its domestic chipmaking capabilities and prevent further supply disruptions following cries for help from the bosses of some of the country’s leading firms.

The investment will form part of a 20-year semiconductor strategy – which has faced long delays – that outlines the UK’s plan to secure its chip supplies and protect against national security risks.

The strategy, which is due to be published later on Friday, outlines a set 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 increase cooperation with international partners as part of its strategy. This week, Britain made an agreement with Japan in Hiroshima to boost defense and semiconductor cooperation.

The government has said the government will initially invest up to £200m between 2023 and 2025 before expanding its commitment to up to £1bn in the next decade. The funding will be used to improve talent flow, access to prototypes, tools, and business support.

“Semiconductors underpin the devices we use every day and will be essential to developing the technologies of tomorrow,” British Prime Minister Rishi Sunak said in a statement.

“Our new strategy is focusing our efforts on where we are strong, in areas such as research and design, so that we can build our competitive advantage on the global stage.”

He added, “By increasing the capabilities and flexibility of the world’s leading semiconductor industry, we will grow our economy, create new jobs, and stay at the forefront of new technological breakthroughs.”

To prevent disruption from future supply shortages, the government said, new guidance would be published to inform businesses of the risks of supply shocks, while the UK would look to increase collaboration with international partners to improve the resilience of the global chip supply chain.

She added that an advisory committee made up of personalities from industry, government and academia has been formed to work closely on joint solutions and implementation.

Rather than matching some of the huge spending commitments made by regions such as the US and the EU, the UK is putting in a different approach aimed at strengthening areas in which it has expertise.

Officials admitted it wouldn’t make sense for the UK to build its own massive factories, like the one run by Taiwanese chip giant TSMC to make the most advanced chips.

Instead, they are focusing on other parts of the semiconductor industry, such as intellectual property, design, and production of non-silicon wafers.

The UK Semiconductor Strategy was expected to debut last year. But it faced a series of delays due to political instability. The country’s semiconductor chiefs have expressed frustration with the lack of concrete strategy from the government on semiconductors.

While the US and EU have pledged billions of dollars to support their respective chip sectors, the UK’s strategy has faced delays and setbacks amid several changes in government due to the resignations of former prime ministers Boris Johnson and Liz Truss.

Pragmatic Semiconductor, a Cambridge, England-based startup that makes non-silicon chips, warned earlier this year that it might have to move abroad if the government didn’t release a plan for the industry soon. And IQE, a small chip company in a semiconductor “group” in Newport, Wales, has also warned that it may have to move to the US or the EU if the government does not act soon.

Scott White, founder of UK semiconductor Pragmatic, said the government’s £1bn pledge – although small compared to that of the US and EU – “actually seems like the right number” that British industry needs. However, he warned that funding would need to be “applied in the right way”.

“Similarly, if it’s just a repackaging of other things out there, it wouldn’t be particularly useful,” White told CNBC earlier this week.

A lesser player in the global chip market, Britain specializes in design, intellectual property, research and manufacturing of advanced composite semiconductors.

It is home to one of the most sought-after semiconductor-related assets, chip designer Arm. Based in Cambridge, Arm-licensed chips are used in approximately 95% of the world’s smartphones.

The country is also known for its role in developing ultra-thin semiconductor wafers made of graphene.

Semiconductors, a supply chain mainly based in East Asia, have become a thorny issue for world governments after global shortages led to supply problems for major automakers and electronics manufacturers.

The COVID-19 pandemic has revealed an over-reliance on manufacturers from Taiwan and China for semiconductor components. This dependency has become fraught with growing tensions between China and Taiwan.

TSMC, the Taiwanese semiconductor giant, is the largest producer of microchips. Its chip prowess is the envy of many developed Western countries, which are taking measures to boost domestic chip production.

In the United States, President Joe Biden signed the CHIPS and Science Act, a $280 billion package that includes $52 billion in financing to boost domestic semiconductor manufacturing.

Meanwhile, the European Union has approved 43 billion euros ($45.9 billion) for Europe’s semiconductor industry with the aim of producing 20% ​​of the world’s semiconductors by 2030.

British lawmakers said the lack of a similar strategy from the government was hurting the country’s competitiveness. On February 3, lawmakers on the Committee on Business, Energy, and Industrial Strategies (BEIS) called for government action on the semiconductor industry, calling the lack of a coherent strategy for microchips “an act of national self-harm.”

#Britain #launched #billion #semiconductor #scheme #United #States #European #Union #boasted #chips

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top