The United Kingdom has an established semiconductor industry known for its strong design capabilities. It is home to notable semiconductor companies like Arm, which is celebrated for designing and popularizing processors based on the RISC architecture and the more specific ARM architecture, and Dialog Semiconductor, which produces application-specific standard products and application-specific integrated circuits.
However, unlike Taiwan, which has strong manufacturing capabilities and is home to TSMC, the largest pure-play semiconductor foundry in the world, and the United States, which has both design and manufacturing capabilities and is home to companies like Apple, Intel, Nvidia, and Qualcomm, the semiconductor industry of U.K. lacks strong manufacturing capabilities and struggles in securing relevant technical resources.
The government of the United Kingdom acknowledges the important role of semiconductors in bolstering its domestic economy and the need to strengthen its position in the global market for semiconductors. Take note that the United States and the European Union have made significant advances in their respective semiconductor industries. Nevertheless, on 19 May 2023, the U.K. government unveiled the UK Semiconductor Strategy.
Explaining the Purpose and Goals of the UK Semiconductor Strategy
Semiconductors are the bedrock of almost all industrial activities and the building blocks of advanced technologies. Advances in the different facets of digital technology are increasing the global demand for these essential hardware components. The entire semiconductor industry is expected to become a trillion-dollar industry by 2030.
Investing in building relevant capabilities in designing and producing semiconductors means banking on the anticipated growth of the global semiconductor industry. A capable semiconductor industry also complements other domestic sectors and industries as it mitigates risks and reduces exposure to global supply chain disruptions.
Semiconductors are also critical in national security. These hardware components are used in several critical infrastructures including energy production facilities, power grids and the entire electric power network, and telecommunications. They are also important components in military and defense technologies, weapons, and other equipment.
The aforementioned details capture the reason behind the proposed UK Semiconductor Strategy. It is fundamentally an initiative aimed at promoting and protecting the national interest of the United Kingdom by boosting the domestic economy and supporting national security through the development of a well-rounded semiconductor industry.
At the core of the strategy is a commitment to invest GBP 1 billion over the next decade to establish the country as a prominent global leader in semiconductor design, research and development, and manufacturing. It includes three problem areas that correspond to three main focus areas. Take note of the following:
• Growing the Domestic Industry: The government will invest in research and development, design, and manufacturing to help domestic companies grow their businesses and create jobs.
• Mitigating Supply Chain Risk: It will also work with relevant stakeholders across different sectors and industries to identify and address risks to the semiconductor supply chain of the country.
• Protecting National Security: The government will also invest in research and development of new semiconductor technologies that are essential to its critical infrastructure and defense.
It is important to reiterate the fact that the general purpose of the UK Semiconductor Industry is to make the country a global leader in semiconductor technology, especially in the design and production of next-generation semiconductors. This strategy has specific goals that correspond to specific action plans. Take note of the following:
• National Infrastructure: Create a new National Semiconductor Infrastructure Initiative to help to build a world-class semiconductor manufacturing infrastructure.
• Grants and Loans: Provide grants and loans to domestic semiconductor companies to help them develop new semiconductor products and processes.
• Investments: Make the country a leading destination for semiconductor investments by 2030 through foreign capital and the arrival of established companies.
• Industry Expansion: Increase the number of semiconductor companies operating in the country by 50 percent and double the number of jobs by 2030.
• Partnerships: Work with international partners to secure semiconductor supply chains and ensure the country has access to the semiconductors it needs.
• Independence: Build new technologies and processes that will make the country less reliant on foreign semiconductor suppliers.