The $11 Billion Elephant in the Room: How Does the UK Compete in the Semiconductor Race?

The global race for semiconductor resiliency heats up as the US unveils its mammoth $11 billion R&D plan and dedicated National Semiconductor Technology Center.
The UK’s National Semiconductor Strategy opts for allocating funds strategically while playing to its unique strengths. While dwarfed by the US figure, let's dive deeper into the UK's approach, examining the specific figures and initiatives driving its semiconductor ambitions.

The American Gambit

The US CHIPS and Science Act earmarks a substantial $52.7 billion, with $11 billion specifically dedicated to R&D. This includes the ambitious National Semiconductor Technology Center, a public-private partnership driving cutting-edge semiconductor research and prototyping. The strategic intent is clear – strengthen US chipmaking capabilities and decrease reliance on foreign suppliers.

The UK Strategic Approach

While the US wields considerable financial muscle, the UK seeks agility through strategic partnerships.
The UK government acknowledges the strategic importance of semiconductors, evident in their £1 billion Semiconductor Strategy launched in March 2023. This plan outlines several key objectives:
· Scaling up manufacturing: Attracting investment and facilitating the construction of new fabs within the UK.
· Strengthening R&D: Supporting research into next-generation chip designs and manufacturing technologies.
· Building a secure supply chain: Fostering partnerships with trusted allies to diversify sources of raw materials and components.
· Addressing skills gaps: Investing in education and training programs to develop a skilled workforce for the semiconductor industry.
Several initiatives are underway to translate the strategy into reality:
· £12 million Collaborative Research & Development (CR&D )Funding: Innovate UK, part of UK Research and Innovation, launched a competition in 2023 to support collaborative R&D projects aimed at scaling up semiconductor manufacturing and enhancing supply chain resilience.
· Collaboration with international partners: The UK is actively seeking partnerships with countries like Taiwan, Japan, and the United States to secure access to advanced chip technologies and build a more robust global supply chain.
· Focus on compound semiconductors: The government is particularly interested in compound semiconductors, used in high-performance applications like 5G and electric vehicles, and has launched funding initiatives to support their development.

The UK's efforts towards semiconductor manufacturing resiliency are still in their early stages. While challenges exist, the potential rewards are significant.

By leveraging its research strengths, attracting investment, and fostering international partnerships, the UK has a chance to establish a secure and competitive semiconductor industry, contributing to its technological and economic independence.

This is merely the opening act. The global semiconductor landscape is dynamic, and unforeseen developments could reshape the competitive landscape.