UK: New £1 billion strategy for UK’s semiconductor sector

London: The National Semiconductor Strategy sets out how up to £1 billion of government investment will boost the UK’s strengths and skills in design, R&D and compound semiconductors, while helping to grow domestic chip firms across the UK.

Working in tandem with industry, investment made by the government will drive research, innovation and commercialisation through the sector – helping to deliver products from lab to market.

It comes as the Prime Minister is at the G7 leaders’ Summit in Japan for discussions on strengthening our tech collaboration with like-minded economies and strengthening supply chains for critical technology like semiconductors.

Semiconductors are vitally important for the modern world we live in, being an essential component for the functioning of almost every electronic device we use. From phones and computers to ventilators and power stations, nearly every piece of technology in the world depends on them.

Over a trillion semiconductors are manufactured each year, with the global semiconductor market forecast to reach a total market size of $1 trillion by 2030. Semiconductors also underpin future technologies, such as artificial intelligence, quantum and 6G.

The strategy focuses on the UK’s particular areas of strategic advantage in the semiconductors sector – semiconductor design, cutting-edge compound semiconductors, and our world-leading R&D ecosystem – supported by UK universities from Cambridge to Cardiff and Manchester to Edinburgh demonstrating global leadership in this space.

Compound semiconductors do things silicon chips can’t, with use cases in evolving technologies such as autonomous driving and future telecoms. Their creation requires expertise in advanced materials, an area of UK science leadership.

To support the growth of the sector in the UK, the government will invest up to £200 million over the years 2023-2025 to improve industry access to infrastructure, power more research and development and facilitate greater international cooperation.

Taking a strategic approach to investment over the next decade, the government will invest up to £1 billion in a range of measures to secure the UK’s advantage in this globally important sector and meet 3 key objectives:

The strategy builds on the consistent support the government has provided for the semiconductor industry, having provided £539 million in grants for research and £214 million directly to SMEs in the sector across the last 10 years, as well as funding 450 PhD students since 2017.

Prime Minister Rishi Sunak said: “Semiconductors underpin the devices we use every day and will be crucial to advancing the technologies of tomorrow. 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.”

“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.”

Science, Innovation and Technology Secretary Chloe Smith said: “Semiconductors are the beating heart of all electronic devices, from powering our phones and cars to medical equipment and innovative new technologies like quantum and AI which will make a real difference to all of our lives. Britain is already a world leader when it comes to researching and designing semiconductor technology – our new strategy will double down on these core strengths to create more skilled jobs, grow our economy, boost our national security and cement the UK’s status as a global science and technology superpower.”

The UK’s Integrated Review placed securing strategic advantage in science and technology at the heart of the UK’s national security and foreign policy. In recognition of the fundamental importance of semiconductor technologies in these areas, the National Semiconductor Strategy demonstrates a clear vision for our position in the sector.

As part of the strategy, the UK will increase its cooperation with close partners, working together to manage national security threats and driving growth in the sector, while championing international cooperation to help develop a coordinated approach to supply chain resilience.

In Hiroshima this week, the UK and Japan committed to establishing an ambitious semiconductor partnership, led by the UK’s Department for Science, Innovation and Technology (DSIT) and Japan’s Ministry of Economy, Trade and Industry (METI). It seeks to deliver new R&D cooperation, skills exchanges, and improving the resilience of the semiconductor supply chain for both countries.

UK Research and Innovation will work with the Japan Science and Technology Agency on a joint investment of up to £2 million in early stage semiconductor research next year. This will support UK and Japanese researchers to work together on fundamental semiconductor technologies.

The strategy has been developed in close consultation with the semiconductor industry and academia, and the government will build on this partnership by creating a new UK Semiconductor Advisory Panel. The Panel will bring together key figures from industry, government, and academia to work closely on shared solutions and implementation.