
Industry responds to UK semiconductor strategy
A key UK semiconductor industry group has published its response to the recent semiconductor strategy, asking for support for the 20 existing fabs.
“We welcome the recently published UK Government Semiconductor Strategy, which is an important initiative to boost this strategically important sector, where the UK already possesses significant strengths,” said the Semiconductor Leadership Group.
This was brough together by TechWorks, which includes the NMI, in March to push for the strategy. It includes the major fab operators in the UK such as Nexperia, Bourns, PragmatIC Semiconductor and Clas-SiC as well as chip designers such as NXP, XMOS, Sivers Semiconductor, Ensilica and Huawei, packaging experts Alter and IP suppliers Imagination Technologies and ARM. It also includes startups Space Forge which is developing systems to make semiconductor materials in orbit, and Cambridge GaN Devices.
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“A successful and enduring industry needs a complete eco-system comprising research, innovation, design, product engineering, manufacturing and end-market consumption. Due to recent geo-political events, there is a unique opportunity for the UK to build a semiconductor industry which competes on a global scale. However, this requires ongoing discussion between industry and government and a long-term view of how to achieve our goals,” said the group. This highlights the lack of industry support for the current strategy, published in May.
The proposed UK Semiconductor Infrastructure Initiative is a positive move they say but it only addresses certain points in the value chain and business stages and does not help all UK companies. Early-stage innovation, design and IP creation businesses will welcome the prototyping and design tool support, but more support is still required for fabless chip vendors or IDMs in their growth business phase, or UK resident manufacturing companies with a need to scale-up their operation through significant capital investment.
“In major emerging markets such as Power Electronics, Net Zero, Photonics, AI, Quantum, IoT, Telecoms and Space the end product and technology demands are different. Indeed, many industry experts have pointed out that future devices need to adopt smarter architectures, multi-chip packaging and a mix of larger silicon geometries integrated with other compound semiconductor materials; so called ‘heterogeneous integration’. In these areas, the UK has a strategic opportunity, with a competitive edge and existing businesses across the value chain looking to grow their operations,” they said.
They are calling for support to build a sustainable ecosystem which comprises each element of the value chain and all players across the sector through appropriate mechanisms; in the manufacturing sector through CapEx or tax incentives to scale up operations to compete globally; or in the fabless or IDM sector through programs to enable business and roadmap growth to remain competitive.
Such initiatives might require an element of guaranteed supply to the domestic market and/ or be subject to performance related metrics. It also wants the government to incentivise the domestic market to build local customer / partner relationships and UK based supply chains to build national resilience and provide alternatives to an IP or enterprise sale to foreign acquirers.
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This will require access to patient / long-term capital from investors with real-world semiconductor experience and understanding to enable semiconductor device vendors (fabless or IDM) to scale over a meaningful period of time. This exists outside the UK, but accessing it across borders places UK companies at a disadvantage and may mean the loss of UK ownership. Another option is to foster friendly inward investment, which is supportive but not exploitive, in a gentle hint about the issues at Nexperia in Newport.
The group points out that education is also key across the value chain. The UK has strong capital markets, however unlike other global markets, they do not understand the semiconductor sector. There is an opportunity for education and promotion here and for government interventions which will incentive potential investors.
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“We need a major initiative in skills and talent,” says the report. “Across Industry, Universities and Schools, but also though increasing public awareness and interest. We have got to reverse the aversion in society to science and engineering as a career aspiration. STEM should be ‘cool’.
Semiconductors are a long game of five to ten years and so is beyond the horizon of any single government. “We need bi-partisan support and a clearly defined critical national infrastructure approach as developed in other countries,” they said in the response: UK-Semiconductor-Our-Opportunity-Techworks-SLG
