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Call for UK semiconductor strategy amid confusion

Business news |
By Nick Flaherty


UK chip firms are pushing for the UK to publish its semiconductor strategy, with a call to support leading edge chip design as well as compound semiconductor manufacturing to tackle the energy crisis.

MPs on the influential Business, Energy and Industrial Strategy Committee published a report calling for the strategy to be published by the government along with its own recommendations.

“The Government is putting UK plc at significant risk by failing to take action in support of the semiconductor industry,” said Committee Chair Darren Jones, an MP in UK chip design hub Bristol.

The report also points out that the industry is uncertain about where primary responsibility within Government lies and to which part of Government they should address concerns.

“We believe that should rest with BEIS, because of its overarching responsibility for industrial strategy, business support, engagement with industry and policy on research funding, and because of its role in protecting UK industrial assets from undue control by overseas entities,” says the report.

However parts of the industry are supported by the Department for Culture, Media and Sport, which oversees the telecoms regulator Ofcom.

“DCMS told us that it had been reviewing its approach to the semiconductor sector and that it planned to publish a semiconductor strategy in autumn 2022. The strategy has already been nearly two years in the making. The industry has waited for the strategy and will base crucial decisions upon it. The Government should lose no more time and should publish its Semiconductor Strategy immediately,” says the committee.

The UK semiconductor industry has supported the recommendations for boosting the supply chain for the design of leading edge chips.

“Sondrel welcomes the recommendation from the BEIS committee to consider supporting the design chain for leading edge node chips, and would encourage the UK government to produce an effective and holistic strategy without being hampered by inter-departmental competition,” Graham Curren, founder and CEO of Sondrel tells eeNews Europe. The company recently floated shares on the AIM stock market to fund growth in the design and production of leading edge chip designs for customers.

“Sondrel is unique in Europe in having the capability and experience to navigate a safe path through the complex design and supply chain, managing the risks in these geopolitically sensitive times,” he said.

“To meet the needs of consumers, it is vital to integrate the IP from key UK-based providers such as ARM and Imagination into a single device, and then to securely procure and manage the capabilities from suppliers in multiple regions around the world.  Integrating international relationships and key UK skills is where the UK can really generate success.”

Imagination Technologies also supported the call following its own launch of an innovation manifesto.

“Imagination finds itself largely aligned with the semiconductor industry report published by BEIS. We are pleased to see that many of the views are similar to our own industry report from June – especially when it comes to developing UK’s existing strengths in R&D and intellectual property,” said David Harold, chief marketing officer at Imagination.

“We are certainly looking forward to the government publishing a semiconductor industry strategy, with the opportunity of enhancing our resilience in the market and ensuring our position of leadership is maintained. There are considerable benefits to this happening sooner rather than later, as prioritising the strategy will give the UK a chance to secure the investment necessary to drive semiconductor innovation with a global impact. We continue to be in close contact with stakeholders across government to ensure our voice is heard.”

Nexperia forced sale 

The committee report follows the recent decision to force Nexperia to sell 86% of its stake in its power fab in Newport, Wales, on security grounds. While this is used for silicon power devices, it was previously also a foundry for compound semiconductors used in sensitive applications such as  radar.

A national Catapult centre for compound semiconductor development and applications was set up in Newport as a result.

The report also singles out cooperation with the US under the CHIPS Act and engagement with Taiwan as possible areas that could yield opportunities for investment for the industry

“Other countries are investing in the resilience of their semiconductor supply chains yet Ministers in the UK can’t even publish their semiconductor strategy on time. “The industry is expecting high growth in the coming decades, which is an opportunity for us to leverage our strategic lead in design and in energy-saving compound semiconductors,” said Jones.

“It is not clear that the support currently offered by the Government is at anything like the scale which is needed to make a difference,” says the report, which also called for facilitating the design and construction of new fabs and supporting a ‘open fab’ in South Wales.

Report recommendations

The report recommends the Semiconductor Strategy consider scope for development of the UK semiconductor industry in:

  • Intellectual property and design;
  • Supporting the design chain for leading edge node chips;
  • Matching UK manufacturing capability to UK design capability;
  • Developing manufacturing processes for silicon semiconductors;
  • Development of existing strengths in compound and advanced material semiconductors, to meet demand in emerging markets;
  • Facilitating the construction of new fabs, including consideration of an open access fab in the South Wales cluster.
  • It also recommends that the Government produces a risk and resilience strategy for the semiconductor industry alongside its Semiconductor Strategy, as a matter of urgency.

“The Government must not overlook the semiconductor industry any longer. Whilst we recognise the difficult fiscal picture in the UK, we call on Ministers to set up a new sector deal as the vehicle to work with industry to agree UK priorities and the best use of any public funds or support. This could be via additional funding or guarantees made available via the Compound Semiconductor Applications Catapult, Innovate UK or the British Business Bank,” it said.

publications.parliament.uk/pa/cm5803/cmselect/cmbeis/291/summary.html

 


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