Pressure grows for a UK semiconductor strategy
Pressure is growing for the UK government to publish its long delayed semiconductor strategy.
An influential UK Parliament committee has criticized the government’s response to its call for publication, while a new survey has highlighted that nearly half of business leaders feel the UK government does not provide enough support for the industry.
“The Semiconductor Strategy—already two years in preparation—needs to be published urgently,” said Darren Jones NMP, chair of the Business, Energy and Industrial Strategy committee. “The delay is difficult to understand, and no reasons have been given publicly. As we observed in our earlier report, the industry has waited for the strategy and will base crucial decisions upon it. Further delay risks inhibiting the development of the semiconductor industry in the UK.”
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At the same time leading UK compound semiconductor company IQE has warned that it could relocate abroad as a result of the delay.
The strategy is being developed by the Department for Media, Culture and Sport (DCMS) which oversees Ofcom, the telecoms regulator. The UK government called for input from the industry in May 2022 as the strategy continued to be delayed.
“The Government agrees fully on the importance of the semiconductor industry. In response to increased global competition and geopolitical tensions, there is a need for timely, coherent and decisive action to be taken across the market,” said the DCMS in response to the committee statements.
It points to the recent passage of the US CHIPS Act and EU CHIPS Act legislation to support semiconductor companies and says it is talking to the US, Japanese and Korean governments about investments.
“Over recent years the sector has become critically under pressure, as market distortions and geopolitical pressures around technology grow alongside the world’s demand for chips. These factors have led to a renewed spate of investments around the world, as countries compete for influence and control over critical semiconductor technologies,” it said.
“The Government is considering where opportunities may exist to cooperate with other Governments directly, including through multilateral fora, in order to improve the diversity and transparency of supply across the global market,” it added.
It also points to a number of private sector communities, such as those run through Techworks (the Technology Network for Embedded Systems, the National Microelectronics Institute, and Power Electronics UK), that strive to provide a voice for UK semiconductor industry stakeholders.
This comes as Charles Sturman is set to take over at CEO of TechWorks at the end of the month, replacing Alan Banks who is retiring.
“Globally, the pace of innovation in fundamental science and engineering continues to accelerate as the resulting technology transforms our world. The depth and breadth of such technology is immense and requires strong collaboration across industry to achieve business success,” said Sturman.
“TechWorks was created to ensure UK companies stay ahead of the curve, by acting as a catalyst and creating non-competitive connected communities to lead technology and market innovation.”
A survey this week by PragmatIC Semiconductor found that two-thirds (68%) of science and technology businesses across the UK agree that the country could achieve the Government’s ‘Superpower’ objective by 2030, 40% of UK business leaders surveyed do not agree the Government is providing enough support for this sector to help them compete on a global scale.
This comes as Prime Minister Rishi Sunak has pledged his ambition for the UK to be a ‘science and technology superpower’ and made it a key part of his agenda.
The research, commissioned by Pragmatic also found that 38% of respondents thought that better government incentives to be based in the UK would encourage them to invest in manufacturing facilities in the country.
Over half (53%) of businesses thought the Government didn’t provide enough incentives for companies to keep their manufacturing operations and headquarters in the UK. Potential incentives could include: cutting business rates to compete with other markets; better government support for capital investments; and better government subsidies for operating costs.
More than a third (35%) highlighted the need to simplify the process of importing materials and exporting finished products to incentivise them to invest in manufacturing facilities in the country, while three in 10 (30%) referenced the need for better supply chain security.
The skills shortage is also a key challenge for growing businesses. Seven in ten (70%) agree they have found it difficult to hire suitable skilled employees to expand their business and attract investment over the last 12 months. Respondents highlighted programmes such as partnerships with universities and T-level placements as effective ways for businesses to attract and retain talent with the right skillsets.
“I’m not surprised to see businesses calling for more support from the Government to realise its ambition of becoming a science and technology superpower,” said Scott White, CEO of Pragmatic Semiconductor.
“The UK needs to retain the value creation from its innovation and research. However, this is only feasible for UK businesses – particularly those who are keen to expand rapidly – if the right support is there to nurture growth and ensure it happens from a UK base rather than overseas. Capital and finance opportunities, alongside UK-focused procurement policies, are critical if we are to create a level playing field with places like the US, the EU and China,” he said.
www.pragmaticsemi.com; www.techworks.org.uk
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