UK tech boost from industrial strategy
The UK government has published its long awaited industrial strategy with moves to strengthen the semiconductor industry with a national centre.
The strategy includes up to £19m for the long awaited national Semiconductor Centre, as well as £35m to extend the recent scheme to boost skills and training and £24m for secure CHERI silicon. There is also £54m to encourage semiconductor engineers to come to the UK in a move similar to the European Union.
“Together with the £5m skills package for this FY, this marks a major investment in the talent pipeline for the industry. It is very welcome and is a significant vote of confidence from the Government in the semiconductor sector,” said Stewart Edmonson,. CEO of the UK Electronic Skills Foundation which is running the £5m pilot scheme this year.
The digital and technologies sector plan also includes boosts for quantum technologies, the electricity supply grid, AI datacentres and driverless cars.
Semiconductors
The UK Semiconductor Centre (UKSC, previously the Semiconductor Institute) will be set up by the Compound Semiconductor Applications (CSA) Catapult in Newport, Wales. It will have an office in a location that is readily accessible for the UK’s semiconductor clusters and international visitors and will be guided by an independent advisory board.
Secondments from industry will also shape the Centre’s early activities, ensuring alignment with sector priorities and strong industry engagement. It will also act as a front door for international collaboration, offering a single point of contact for global firms and governments to engage with the UK semiconductor sector.
“We want industry at the heart of this effort – and we’re working with experts from across the sector to make sure the UK Semiconductor Centre delivers what businesses need to thrive,” said UK Science Minister Lord Vallance.
“Semiconductors are enabling technology for AI, net zero, mobility, quantum, neuromorphic computing and defence and they underpin the UK’s Plan for Growth. The new UK Semiconductor Centre will play a pivotal role in creating a stronger, more connected UK semiconductor innovation ecosystem. The centre will build on the UK’s recognised strengths in design, IP, advanced packaging and compound semiconductors and leverage existing semiconductor clusters in Scotland, Northern Ireland, Cambridge, South Wales, the North East, Bristol and Southampton,” said Raj Gawera, Interim CEO of CSA Catapult.
“In close collaboration with industry, academia and government, the Centre aims to drive growth and scale of strategic technologies from materials to devices to applications. CSA Catapult, with the support of Innovate UK and DSIT, is pleased to play a strategic role in mobilising and establishing the UK Semiconductor Centre and working closely with stakeholders to shape the detailed plans so together we can grow the UK semiconductor sector.”
A key boost though is £24m to promote the adoption of adoption of the CHERI memory-safe hardware architecture for designing secure next-generation chips.
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“Since the birth of the integrated circuit in the 1960’s the UK has been a pioneer in semiconductor innovation. Yet, we have failed to consistently turn that innovation into sustained commercial and competitive advantage compared to other leading nations. This matters because semiconductors have evolved from a useful technology into an essential component of our way of life, becoming crucial to our sustained wellbeing,” said Charles Sturman, CEO of national industry group TechWorks. “We must ensure that this new body delivers real value to the actors it aims to support, and I look forward to working closely with the centre as we grow a UK semiconductor industry ready for the 2030’s.”
“There is still more to come on the sector plans,” he tells eeNews Europe. “There is policy planning around semiconductors over the next few years and it is expected that the National Semiconductor Centre will be part of that. I’m fairly pleased that government is listening to industry. I have concerns about the governance and the right levels of engagement with industry,” said Charles Sturman CEO of industry group TechWorks.
TechWorks recently signed a Memorandum of Understanding (MoU) with the Canadian Semiconductor Council (CSC) for more collaboration and the two are supporting a jointly funded research and development program focusing on advanced packaging, photonics and emerging materials.
The strategy also builds on the semiconductor Innovation and Knowledge Centres launched earlier this year with two more as yet unnamed centres to be backed by £25 million.
There is also £10 million to expand Cyber ASAP supporting 25 academic teams a year, plus £2 million for Belfast’s Cyber AI Hub, aiming to support 28 academic spinouts by 2030. £6 million will extend Cyber Runway accelerator, supporting 60 startups annually with mentoring, skills development and networking to improve survival rates and growth.
Quantum
£670 million will be dedicated to accelerating the application of quantum technology through a ten year deal to fund the National Quantum Computing Centre (NQCC). By 2035, the UK aims to develop quantum computers capable of outperforming conventional supercomputers, and the NQCC is running a testbench with machines from Rigetti, Oxford Motion and Orca Computing.
Electrical grid boost
£370m is allocated for advanced connectivity improving coverage for communities, providing connectivity across transport networks, and supporting defence applications such as drones.
It includes a £240 million Advanced Connectivity Tech R&D programme, and a further £130 million will go towards strengthening the capabilities of the UK Telecoms Lab, enhancing the security and reliability of networks.
Improving the electricity grid with digital technology is a key element of the strategy, especially in the light of the Spanish power outage in April.
The Connections Accelerator Service aims to streamline grid access for major investment projects, and this is expected to begin operating at the end of 2025. New powers in the Planning and Infrastructure Bill, currently before parliament, could also allow the Government to reserve grid capacity for strategically important projects to cut the long waiting times.
“As a UK manufacturer at the heart of the electricity supply chain, it’s a huge confidence boost to see a firm commitment to strengthening the sector that keeps the country powered. This is a vital industry, central to economic growth, energy security and decarbonisation,” said Jon Hiscock, CEO of UK electrical equipment manufacturer Fundamentals.
“We’re encouraged by the roll out of the Connections Accelerator Service. Speeding up grid access for strategically important projects is exactly what our industry needs to drive innovation and modernise the grid. However the UK’s ageing electricity network was never designed to handle the kind of power flows that come from decarbonisation. Turning ambition into delivery will be the real test.
Read more on Fundamentals in our CEO interview.
“We’re also optimistic about the direction of wider electricity‑market reforms, including a final decision on zonal pricing. This could be a promising step toward smarter, fairer power markets.
“And the Growth & Skills Levy is a smart move. It’s how we turn ambition into the practical skills industry desperately needs. What will make this a success is ensuring these opportunities reach every young person and help fill critical gaps in engineering and the clean energy economy.”
AI
“Semiconductors get a passing mention in this morning’s soft-launch of the Industrial Strategy, but they might be the key to its success,” said Phillip Kaye, Co-founder and Director of UKL AI firm Vespertec.
“If the next industrial revolution is going to come in the form of AI factories, then UK businesses need access to the most advanced hardware possible to ensure they’re not left behind. Semiconductor materials are the bedrock of all modern computing, from GPUs to CPUs, and the UK’s universities and research institutions have long led the charge in their development.
“Boosting funding for this research in universities across the UK, starting with Wales, might well be the secret ingredient that keeps the UK running shoulder to shoulder with tech giants in the US, Taiwan and China. Here’s hoping the Industrial Strategy, when published in full, reflects that.”
The digital sector plan is one of five in the strategy. The Advanced Manufacturing plan has up to £4.3 billion in funding, including up to £2.8 billion in R&D over the next five years, with the aim of anchoring supply chains in the UK to increase electric vehicle production to 1.35 million, to leading the next generation of technologies for zero emission flight. This also includes funding for battery manufacturing.
The Clean Energy Industries plan aims to double investment by 2035 with £700m for Great British Energy and the Connections Accelerator Service as well as £2.5bn over the next five years for the STEP (Spherical Tokamak for Energy Production) flagship fusion programme. This aims to deliver a prototype fusion power plant by 2040 at West Burton, Nottinghamshire, on the site of a former coal-fired power station., STEP is a cornerstone of the UK’s clean energy and industrial future.
“The UK is at the forefront of global fusion energy research, and STEP is the flagship initiative poised to transform that leadership into commercial reality. By building our prototype fusion power plant in the East Midlands, we’re not only advancing clean energy but also creating high-quality jobs, driving innovation, and delivering economic growth both regionally and nationally,” said Paul Methven, CEO of UK Industrial Fusion Solutions (UKIFS) which is building the STEP reactor.
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