UK should back compound semis, says government report

Business news |
By Peter Clarke

A UK government committee has produced a report urging financial support for compound and advanced materials semiconductor R&D and manufacturing.

The report makes the argument that compound semiconductors is one of the sectors or emerging technical and commercial significance where the UK has a reasonably strong academic and R&D base.

Two of the recommendations from the BEIS (Business, Energy and Industrial Strategy) committee are related to the south-Wales compound semiconductor cluster and the role of an open-access foundry there. It also called on the government to help ensure a transfer of the Nexperia-owned Newport Wafer Fab in South Wales to a new owner.

The government should also secure partnerships with strategic allies – the US, EU and Taiwan – to secure inward investment, the report said.

Informal strategy undermined

The report calls for the government to provide a strategy and financial support for the development of existing strengths in compound and advanced material semiconductors, to meet demand in emerging markets. It also says the government should facilitating the construction of wafer fabs, including consideration of an open access fab in the South Wales cluster.

For several years this had been part of an informal strategy. This was undermined when Nexperia NV (Nijmegen, The Netherlands), a subsidiary of China’s Wingtech Technology acquired Newport Wafer Fab in 2021. The UK government has recently ordered Nexperia to sell 86 percent of its 100 percent  ownership (see Nexperia forced to sell Newport Wafer Fab stake) under national security considerations. That decision is under an appeal from Nexperia.

“Following the decision to require Nexperia to divest from its Newport site, Ministers must proactively engage with potential buyers to secure the future of our vital semiconductor cluster in South Wales,” said committee chairman Darren Jones, in a statement.

Selective leading-edge work

The BEIS report underlines the strategic importance of semiconductors in the modern world and states that the UK is particularly exposed to disruption in the global supply of semiconductors and is falling behind other governments in mitigating such risks. It also calls for a government strategy on semiconductors to be published.

Other recommendations include support for the design and intellectual property creation for leading-edge node silicon chips including both circuits and processes.

The report said public funds and support could be made available via the Compound Semiconductor Applications Catapult, Innovate UK or the British Business Bank.

The UK government has until January 28, 2023, to respond.

Related links and articles:

The semiconductor industry in the UK

News articles:

Nexperia forced to sell Newport Wafer Fab stake

IQE has vision for billion-pound foundry in Newport

UK government opens inquiry about domestic semiconductor industry

China’s Nexperia buys Newport Wafer Fab amid concerns

Newport Wafer Fab under threat of Chinese takeover

UK government helps NWF develop GaN foundry process

Opinion: Is the West still blind to China’s ‘buy-the-tech’ strategy?


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