The plan, known as the National Semiconductor Strategy, was unveiled on 19 May, outlining measures to bolster the UK’s strengths and skills in design, R&D and compound semiconductors, while helping to grow domestic chip firms across the UK.
Growing UK industry
Semiconductors are integral to nearly every electronic device we use; from smartphones and computers to ventilators and power stations, nearly every piece of technology in the world depends on them.
Over a trillion semiconductors are manufactured each year, with the global semiconductor market expected to reach a total market size of $1 trillion by 2030. Semiconductors also underpin future technologies, such as artificial intelligence, quantum, and 6G.
Taking a strategic approach to investment over the next decade, the Government plans to secure the UK’s advantage in this globally important sector by meeting three key objectives:
• growing the domestic sector
• mitigating the risk of supply chain disruptions
• protecting our national security
The National Semiconductor Strategy focuses on the UK’s particular areas of advantage in the sector. These include semiconductor design, cutting-edge compound semiconductors, and our R&D ecosystem, which is supported by key UK universities, including Cambridge, Cardiff, Manchester, and Edinburgh.
Compound semiconductors can do things silicon chips can’t, with applications in evolving technologies such as autonomous driving and future telecoms. Their creation requires expertise in advanced materials, an area of UK science leadership.
To support the growth of the sector, the Government aims to invest up to £1 billion over the next decade, with an initial investment of £200 million allocated for the years 2023-2025. This funding will be used to improve the talent pipeline and facilitate access to things like prototyping, tools and business support for UK firms.
These efforts will include investment in a new National Semiconductor Infrastructure Initiative to unlock the potential of British chip firms in these key areas. It will explore whether better access to prototyping facilities for chip firms is needed to tackle barriers to innovation and grow the industry.
In addition, it will also seek out opportunities to make specialist software tools more available for start-ups.
International collaboration
Efforts will be made to foster international cooperation and develop a coordinated approach to supply chain resilience.
The strategy comes as the Prime Minister is attending the G7 leaders’ Summit in Hiroshima, Japan for discussions on strengthening our tech collaboration with like-minded economies and strengthening supply chains for critical technology like semiconductors.
So far, the UK and Japan have committed to establishing an ambitious semiconductor partnership, led by the UK’s Department for Science, Innovation and Technology (DSIT) and Japan’s Ministry of Economy, Trade and Industry (METI). This aims to deliver new R&D cooperation and skills exchanges and to improve the resilience of the semiconductor supply chain for both countries.
UK Research and Innovation will collaborate with the Japan Science and Technology Agency on a joint investment of up to £2 million in early-stage semiconductor research in 2024. This will allow UK and Japanese researchers to work together on fundamental semiconductor technologies.
Industry collaboration
Working in tandem with industry, the investment will drive research, innovation and commercialisation through the sector, helping to deliver products from lab to market.
The National Semiconductor Strategy aligns with the UK's Integrated Review, which placed strategic advantage in science and technology at the forefront of national security and foreign policy.
To ensure effective implementation, the Government will establish a new UK Semiconductor Advisory Panel, which will bring together leading figures from industry, the Government, and academia to consisting of industry to address challenges and provide shared solutions.
Safeguarding supply chains
The surge in demand for consumer electronics during the pandemic demonstrated how global industries can be impacted by semiconductor supply issues.
The Government will take steps to help sectors mitigate the impact of future shortages. It seeks to protect critical sectors (essential services, healthcare, critical national infrastructure and defence) from disruptions that could cause risks to life, or national security.
To help protect against future disruption, the Government commits to:
• new guidance to be published to help businesses better understand risks and steps they can take to be more resilient against supply chain shocks
• continued collaboration through international initiatives – like the UK’s technology partnerships with the US, Japan, and the Republic of Korea – to explore shared approaches and solutions to improve global supply chain resilience
This focus on global collaboration has received praise from some corners of the industry, with Dunstan Power, Director of ByteSnap Design, commenting: “It is good to see the UK Government seeking to better understand the reality of the worldwide semiconductor market and how reliant the West, and the UK in particular, is on SE Asia for semiconductors.
“Britain is strong on intellectual property innovation in semiconductors and this fund will help with this part of the market.”
Nonetheless, according to Power, more needs to be done: “It will not address the reliance on overseas suppliers for manufacture and, as such, doesn't tackle the threats to supply chains from volatile geopolitics,” he claims.
The importance of semiconductors
Prime Minister Rishi Sunak emphasised the crucial role of semiconductors in advancing future technologies and highlighted the strategy's focus on leveraging the UK's core strengths in research and design. “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.”