UK semiconductor strategy held up by maternity cover uncertainty

News | April 17, 2023

By Peter Clarke

The UK government’s long-awaited semiconductor strategy is late again, delayed because Michelle Donelan, the Secretary of State for Technology is on maternity leave, according to the Politico website.

The initiative, more than two years in the making, was expected to be rolled out in March (see UK chip strategy roll out expected in March). Politico states that an announcement had been pencilled in for Thursday April 20 but it has been pushed back while the government decides who will cover maternity leave for Secretary of State Donelan. Politico referenced Whitehall official as its source.

The UK has taken years to develop a semiconductor strategy while the European Union and the United States have announced multibillion-dollar manufacturing subsidy programs under their respective Chips Acts. Many nations and regions of the world are opting to provide subsidies to try and ensure a domestic supply of chips. They have been stimulated by after chip supply chain crisis underlined a dependence on southeast Asia that had grown over decades due to globalization.

According to previous reports the UK semiconductor strategy with a budget of single-digit billions of pounds has already been rejected once by the Treasury as too expensive (see UK chip strategy will include taxpayer funding). This compares to the €43 billion spend outlined by the European Commission and the $52 billion chip manufacturing budget approved by the United States.

Slowness brought criticism

But it is also the slowness of the UK government’s response that has brought criticism from companies and industry organizations. Some of these companies have indicated that without financial support from UK taxpayers they may have to relocate businesses abroad (see Pragmatic CEO tells UK government, support us or we leave). Previously the progress of the semiconductor strategy was delayed due to a departmental re-organization, which saw the creation of a Department for Science, Innovation and Technology and the appointment of Donelan as the Secretary of State.

Donelan previously served as Secretary of State for Digital, Culture, Media and Sport from September 2022 to February 2023; the department which originally had responsibility for developing the semiconductor strategy.

No decision has been made on who will cover for Donelan, who is due in April. And the government has yet to decide who will make the announcement. The strategy now has an agreed “ballpark figure” for funding from the Treasury and the delay is more to do with how the announcement appears, Politico said, citing the unnamed official.