Thomas Alsop
Research expert covering the global hardware industry
The long-awaited UK government’s national semiconductor strategy, published in May 2023, falls in line with the growing global awareness of the vulnerability of semiconductor supply chains. Geopolitical factors and demand shifts have highlighted how fundamental these components are to a variety of technologies and applications in the modern world. The semiconductor market in the UK, valued at 1.8 billion British pounds in 2022, is forecast to grow in the coming years as demand for chips increases – albeit following a slight dip in 2023 due to difficult macroeconomic conditions observed across the world. However, like the policies actioned by other countries, the UK’s strategy is for the longer term.
The UK's semiconductor strategy will focus on the country’s core strengths
The UK’s national semiconductor strategy, a plan that will see up to one billion British pounds offered to chip companies over the next decade through to 2033, aims to secure world-leading strengths in future semiconductor technologies. The UK will look to capitalize on areas where it already leads such as in intellectual property (IP) and design, compound semiconductors, and research and development. IP providers headquartered in the UK include the likes of Arm and Imagination Technologies, while tech firms such as Apple, Intel, and Infineon all have a UK presence with a focus on semiconductor design and development.Increasing semiconductor manufacturing remains a priority
In other parts of the world, strategists have been keen to highlight the need to expand semiconductor manufacturing in their respective regions to safeguard chip supplies – something the UK strategy avoids as competing with the likes of the United States or parts of Asia on this front would be a difficult task. Currently, much of the world’s dependence on advanced semiconductor manufacturing is centered on these regions, particularly in Taiwan, with heavy reliance falling on one company – Taiwan Semiconductor Manufacturing Company (TSMC). The situation has been made more precarious due to the tense relationship between Taiwan and China, and their relationship with the United States.How does the UK strategy compare to other countries’ plans?
Government opposition has highlighted that the planned investment figure falls short when compared to other regions around the world. In Europe, the European Chips Act sets out plans for 43 billion euros of public and private investment as it seeks to increase its market share by value in leading-edge semiconductors to 20 percent in the next decade. Meanwhile, in the United States, the CHIPS for America Fund will see over 50 billion U.S. dollars be directed toward semiconductor manufacturing, and research and development. Despite the varying approaches, all governments have highlighted the need for such semiconductor strategies to help facilitate technological innovation, boost growth and job creation, bolster international positioning, as well as to protect national security.
