The U.K. government has presented its long-awaited plan to catch up with other regions in semiconductor research and design.

 

The National Semiconductor Strategy, unveiled on May 19, will pursue three main ambitions. The first is to grow the U.K. semiconductor industry, while the second is to mitigate the risk of supply chain disruptions and the third is to protect national security. 

 

The plan represents an investment of up to £1 billion over the next decade to improve access to infrastructure, to support R&D and to facilitate international cooperation, with up to £200 million over the 2023-2025 time frame. The funding will also be used to improve the talent pool and make it easier for British companies to access services such as prototyping, tools and business support.

 

U.K. semiconductor industry, semiconductors, chips, integrated circuits

“Our new strategy focuses our efforts on where our strengths lie, in areas like research and design, so we can build our competitive edge on the global stage,” Prime Minister Rishi Sunak said in a statement. “By increasing the capabilities and resilience of our world-leading semiconductor industry, we will grow our economy, create new jobs and stay at the forefront of new technological breakthroughs.”

 

The National Semiconductor Strategy will leverage the U.K.’s pillars of excellence in the semiconductor sector, i.e., semiconductor design, advanced compound semiconductors and R&D ecosystem, supported by the U.K.’s prominent engineering universities from Cambridge to Cardiff and Manchester to Edinburgh.

 

Industry voices

 

Reactions from the industry are starting to come. While most people applaud the National Semiconductor Strategy, we can’t ignore the mixed comments. 

 

Expressing concerns about the strategy implementation, Andrew Thompson, an intellectual property lawyer at London-based law firm EIP who specializes in semiconductors, said, “This initial announcement of the U.K.’s Semiconductor Strategy, while welcomed, does not tackle how the strategy will work in practice. Without that, it will be difficult to assess the impact on how U.K. companies in this space operate.”

 

This week, the U.K. and Japan have committed to a semiconductor partnership, led by the U.K. Department for Science, Innovation and Technology (DSIT) and the Japanese Ministry of Economy, Trade and Industry (METI). The partnership aims to establish new R&D cooperation, skills exchange and improve the resilience of the semiconductor supply chain for both countries.

 

“The U.K.’s new Hiroshima Accord with Japan might in fact be of more consequence to many semiconductor companies,” Thompson said. “It highlights the importance of ensuring that collaborative R&D, and therefore intellectual property, is structured in a way that serves the interest of the U.K.’s relatively small sized sector and its reliance on allies in terms of innovation. Semiconductor companies need to carefully consider whether collaborative IP ownership provisions are right for them and be conscious of the risk of know-how leaking across borders, even when confidentiality provisions are written into agreements.”

 

Thompson added, “It is disappointing that IP, which is meant to be an important area of semiconductor strategy, has so far been largely ignored today – more so given the U.K.’s strength in core IP development. While more detail might be included in the official strategy document, there are several ways in which the current system can be streamlined and made more efficient. These include fast-tracking the process of obtaining patents in the first place and introducing tax incentives for companies generating profits from semiconductor-related inventions specifically.”

 

Amelia Armour, partner at Amadeus Capital Partners, a U.K. VC firm which invests in semiconductor startups, expressed her concern about the level of investment announced for the next two-year period. “It is disappointing, especially considering the U.K. needs to try to keep pace with the investment levels announced as part of the EU and U.S. Chip Acts,” said “£200 million spread over many initiatives won’t achieve much and will need to be allocated in a very targeted way to have impact. The strategy also comes across as lacking compared to the £2.5 billion which has been announced for quantum technologies.”

 

In a linkedIn post, however, Russell Haggar, a deep-tech adviser, consultant, and mentor who has been involved with key organizations such as Silicon Catalyst and Cambridge Wireless, urged people to take a step back and get it right. 

 

“The U.K semiconductor strategy is out at last,” Haggar said. “DSIT’s post below summarizes what it wants to achieve with its £1 billion budget. It’s pretty decent, but you wouldn’t know that from some of the coverage.”

 

U.K. Commits £1B to Semiconductors

Haggar continued, “Disappointingly predictably, many people with their own agenda are dunking on the funding. But comparisons with U.S. and EU budgets are irrelevant. The U.S.’s $52 billion includes $11 billion for R&D which, on a like-for-like basis, would be £1.5 billion for the U.K. – so this funding isn’t actually that far off the pace. Yes, we could spend an eye-watering amount on new manufacturing fabs, but no-one from the industry is even asking for that. Comparisons with the $52 billion number are meaningless.”