techUK has called for the British government to turn “rhetoric into action” – two years after the launch of a “National Semiconductor Strategy” that still hasn’t allocated its £1 billion in funding.
The trade body’s updated ‘UK Plan for Chips’ features 27 recommendations two years on from the strategy’s belated launch – and explicitly calls for a “diverse range of funding options… including throughout the entire scaling life cycle of a semiconductor business.”
techUK said: “The cost of failure in testing designs carries high financial risk, even more so with advanced nodes. This can discourage companies from… innovating in new designs, especially SMEs and scale-ups who struggle to access the technical support needed for developing multi-vendor EDA tool design flows. This lack of support is a major barrier in getting designs to production, especially at the cutting edge…”
It urged the government to invest in backing an “open access” hybrid foundry to integrate “semiconductors with photonics and other advanced materials for applications in quantum, sensing and communications. This hybrid approach would allow the government to support the development of photonics, semiconductors and photonics with one foundry, furthering the UK’s leadership across multiple technologies.”
The report’s release has reignited discussion on the UK’s place in the industry, with techUK again highlighting the lack of financial support for the sector compared to the billions offered elsewhere, particularly in the US and China where financial support has exceeded $110 billion.
Professor Wyn Meredith, Chair of CSconnected (an organisation representing compound semiconductor companies) told The Stack: “The UK government’s £1 billion commitment, made in 2023 but yet to be deployed, provides a foundation, but future investment must be strategic and at a level that matches global competition to enable growth, strengthen supply chains, and support long-term industry growth.
“With the right backing and a coherent national strategy,” he adds, “the UK can have a thriving and sustainable sovereign capability…”
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How investment is delivered to the sector is another point of contention in the industry, with some calling for an increased focus on manufacturing after the government allocated initial funding to R&D and Design IP.
Echoing industry complaints from 2022, Rodolfo Rosini, CEO of Vaire Computing, said the government should focus more on manufacturing and could support new fabs by cutting red tape and acting as a “buyer of first resort”, buying chips from domestic manufacturers to boost both the industry and its own productivity.
He told The Stack that not focusing on manufacturing was “a mistake”:
“The distance between my design team and the foundry matters, and if we don’t have prototyping facilities [nearby], we will move the design team.” He added.
Pragmatic Semiconductors, a UK based chip manufacturer, has a similar outlook on manufacturing and backed techUK's calls for acceleration on the strategy, describing it as "vital for economic growth, innovation, and resilience."
"Core value creation lies in semiconductor manufacturing, which has significant potential to boost the UK’s economy. Europe and the US are already investing heavily; competitive incentives in areas such as capital investment are urgently needed to level the playing field." CTO Richard Price told The Stack.
Realigning the UK’s semiconductor strategy
While its financial offering was described as a “drop in the ocean” by some, the strategy was welcomed by many upon its initial release and provided some clarity on the UK’s vision for the chips sector.
An initial burst of activity also boosted its credibility, with the government establishing an advisory panel, multiple infrastructure studies, Innovation Knowledge Centres, and early stage start-up incubator Chip Start UK.
However, a change of government in July has brought a re-evaluation of the best way forward, with the Department of Science, Innovation and Technology (DSIT) recontextualising its semiconductor plans under the government’s new Industrial Strategy in a response to The Stack.
“Our number one priority is to drive growth up and down the country as we deliver on our Plan for Change,” the government said, “and mobilising billions of pounds of investment into growth industries like the semiconductor sector will be a key focus as part of that.
“We are looking at how a range of sectors can drive the growth we need through our Industrial Strategy” a DSIT spokesperson added.
Dr Andy Sellars, a member of the government’s Semiconductor Advisory Panel, said that taking the time to align an approach to semiconductors with other industrial strategy work will allow the next phase of delivery to have a greater impact.
“It’s making sure that the next step aligns with things like the Quantum Infrastructure Review published by the Royal Academy of Engineering and the Industrial Strategy. [Work on the strategy] may look like it's paused, but I think there’s a lot of work going on in the background,” he told The Stack.
Dr Sellars also backs a more specific approach to investment to ensure the UK makes the most of its varied strengths in the sector, highlighting the diversity of technologies he sees coming through the Chip Start UK incubator.
“Although the UK represents a relatively small proportion of the global semiconductor market, we have always punched above our weight by competing in highly specialist areas such as R&D, design / IP and photonics,” he said.
The need for a national centre to lead the way
With the industry and government seemingly in disagreement on many of the strategy’s finer points, one solution highlighted by both techUK and Dr Sellars is the need for a National Semiconductor Centre.
Standing as the first recommendation in the UK Plan for Chips, a call for the establishment of an outward facing centre did see progress last year when the government announced an independent institute to support the national strategy just before the election.
It’s not clear if the institute exists in any concrete fashion now though and, if it does, it has made very little noise since the announcement.
Despite the stalled launch on the institute, techUK said a National Semiconductor Centre would be a crucial way of moving forward on many of the recommendations made in its report.
“Fundamentally we believe this centre should be industry focused and with commercialisation of the UK's semiconductor sector in mind,” Laura Foster, Associate Director of Technology and Innovation at techUK, told The Stack.
“It would be a crucial part of pushing forward many of the recommendations in this report (though it would still need to work with other governmental departments in this space, including the semiconductor team within DSIT,)” she added.
