Industry body offers five-point plan for UK chip sector

Business news | December 17, 2024

By Peter Clarke

5G Analog Materials & processes semiconductor Optoelectronics Automotive silicon quantum AI

The UK government should focus on fostering fabless chip companies, support work in non-CMOS areas and encourage the hosting of a pilot manufacturing line, according to a strategy paper from UK industry body Techworks.

Only after all that has been done over the next ten years along with the creation of some world-class UK chip companies could the country be ready to copy the US and European Union with large funding subsidies for leading-edge manufacturing, Techworks said.

The “realistic” assessment that the UK should stick to what it is good at, may be welcomed by the UK government but the report also calls for the government to create a financial landscape that will send billions of pounds of additional equity finance towards semiconductor startups.

Techworks’ strategy document outlines policies to support semiconductor-based endeavours in the UK, and was prepared ahead of the UK government’s Industrial Strategy consultation.

Techwork’s paper is entitled SEMI35 – A UK strategy for semiconductors to indicate the proposals have a ten-year horizon and comes up with a five-point plan.

The five points are:

Foster a new generation of application-focused fabless chip companies. A ten-year target to build and retain $100 billion in value, followed by a 20-year goal of $1 trillion, is recommended.
Foster a new generation of non-CMOS chip companies. New or existing IDMs or fabless with onshore foundries in silicon photonics, MEMS or compound semiconductors. The aim should be to establish at least one UK company among the global top 10 companies, valued at more than US$10 billion within 10 years, with others in progress.
Provide scale-up support for UK manufacturers: Support SMEs in the areas power electronics, photonics, quantum and emerging new materials
Create a UK pilot line and innovation facility for photonics, quantum, sensors and bio-chips.
Establish a design competence centre to upport for UK chip design teams.

To this end the paper suggest the UK government increase equity funding and free pension funds of regulatory constraints. The need is to achieve funding rounds that can be similar to those deployed in the US, the report said.

In the absence of this promising UK startups get acquired before they can scale up and create the full value and employment they are capable of doing.