A modest level of government investment compared to the EU and US reflects a more targeted approach, but will need to be used wisely if it’s to have any impact
UK sets out its semiconductor vision: On 19 May 2023, the UK Government unveiled a 20-year plan for the country’s semiconductor industry. The National Semiconductor Strategy will “double down” on design, research and advanced chip leadership, helping to meet a broader goal of cementing the UK’s position as a global science and technology superpower. With strategic advantage in these fields at the heart of UK national security and foreign policy, the Government’s vision recognises the fundamental importance of semiconductors for today’s electronic devices and future technologies, such as AI, quantum and 6G. The strategy focuses on areas where the UK’s strengths lie (e.g. compound semiconductors), while leveraging existing capabilities and experience, and universities. The hope is to help establish the country’s competitive edge and, in turn, grow the economy and create jobs.
The strategy aims to power research and facilitate international cooperation: Taking a strategic approach to investment over the next decade, the Government will inject up to £1bn into a range of measures to secure the UK’s advantage in a globally important sector. This investment (of which £200m will be made available for the 2023-2025 period) will go towards meeting three key objectives:
Growing domestic chip firms;
Mitigating the risk of supply chain disruptions; and
Protecting national security.
The strategy builds on the support the Government has already provided for research and PhD students, and directly to SMEs in the sector over the last 10 years. It also follows a recent UK-Japan commitment to establish collaboration in the semiconductor industry, covering R&D cooperation, skills exchanges and efforts to improve supply chain resilience for both countries.
The level of state funding shows a lack of ambition: The UK’s long-awaited plan has been met with a mixed reception. Arm welcomed the strategy, which it considers will “support the UK’s effort to play a part in global supply chains”. However, there is disappointment about the scale of investment support that will be provided by the Government. The £1bn that will be released over the next decade has been described by Labour as lacking “ambition” and as “frankly flaccid” by Cambridge-based Paragraf. It also sits in stark contrast to the $52bn (£42bn) earmarked by the US Government for semiconductor grants and other incentives, and the €43bn (£37bn) of public and private funding identified by the EU. The UK figure is therefore dwarfed by the sums that will be mobilised as a result of the EU and US’s Chips Acts, and any spend will need to be carefully targeted to achieve any meaningful impact.
