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at the world chip table, we need a vibrant ecosystem from design through manufacturing to chip sales to end users. Some recent examples of UK-based success and scale up stories are the opening of two new advanced fabs: Pragmatic’s manufacturing facility in Durham and Paragraf’s manufacturing site in Huntingdon, Cambridgeshire. The recently launched UK Chipstart incubator program also saw 27 chip start-up applicants in just two weeks. The long-awaited UK semiconductor strategy was launched in May 2023 and despite the many negative commentators, it was, I believe, a good start. However, it is just the beginning of a long programme of thought and consultation to consider the many varied ways in which the UK must adapt and build long term policy. In parallel with the strategy, the government initiated a feasibility study - which Techworks is part of - to build an evidence base and recommendations to support the interventions highlighted in the strategy. This project is a complex undertaking, but we are making good progress.
The government also created an advisory panel consisting of several domain expert individuals, several of which are our members (
https://www.gov.uk/government/groups/ semiconductor-advisory-panel). The government is also looking to increase cooperation with international partners. For example in 2023 the UK struck a deal with Japan to boost collaboration on semiconductors.
What impact is Covid still having, if any?
I don’t believe Covid is directly impacting the industry anymore but the knock-on effects from the pandemic are certainly still being felt. The challenges for the global industry going forward are more political along with supply chain issues and huge skill shortages in many countries. It is worth pointing out that whilst the UK skill shortage is well reported and indeed critical, most other countries are also struggling here, so the UK has an opportunity to do better than others.
Can you summarise the UK government’s semiconductor strategy going forward?
The UK government’s semiconductor strategy covers three areas; national security, supply chain resilience and growth in the domestic sector. The first two are in recognition of the criticality of semiconductors / chips to many other supply chains and indeed those supporting critical national infrastructure and
www.cieonline.co.uk
defence. It is important to recognise that the semiconductor industry consists of a global web of many interconnected relationships and supply networks. So, in these first two areas, the discussion is around how can we build multi-lateral arrangements with our friends and partners, whilst also evaluating the potential to leverage some key home-grown capabilities, for example in compound semiconductors where we do have globally competitive business. In the third area, domestic industry, the emphasis so far has been on recognising and looking to boost the UK’s long history of early-stage innovation and R&D which has led to many successful companies, such as ARM, Cambridge Silicon Radio and more recently Graphcore. The stated aim is that over the next 20 years, the UK will secure world leading positions in the new semiconductor technologies of the future by focusing on these fundamental strengths.
What is Techworks’
Semiconductor Leadership Group position on this and why? We welcome the UK Government Semiconductor Strategy, which is an important initiative to boost this important sector, and the accompanying infrastructure feasibility study. However, to be truly successful in the longer term, I believe the UK must also invest and support the wider ecosystem, such as manufacturing, and some of the end- user equipment and service companies in disruptive markets such as NetZero, Quantum and Neuromorphic AI. We need a wider ecosystem or value chain to address the issue where an innovative early-stage company gets bought by foreign investors or a foreign company and where there is a mismatch
in size and commitment. What I mean by this is that there is a world of difference between a company which buys a useful tech asset in the UK and ultimately exports that to their HQ as opposed to companies which invest heavily and commit to the UK by building and retaining a significant UK-based team or business unit. Ultimately, as more and varied entities grow in the UK, we can create a melting pot of collaboration, talent, investment and entrepreneurship which leads to a self- sustaining ecosystem. This is exactly the story of Silicon Valley. Our aim is to work with the
Government to help identify the strengths and opportunities which face the UK semiconductor sector and provide expert advice and recommendations for direct action which can deliver the most positive impact. Our recently published paper outlines a number of thoughts in support of the UK semiconductor sector designed to drive commercial success: https://
www.techworks.org.uk/semiconductor- leadership-group
I have re-printed the conclusion of that paper below:
We urge government to work with industry in defining a set of policies which work in concert to build a long term sustainable and successful microelectronic ecosystem. Each element of the value chain should be supported to build a critical mass of UK know-how, talent and cross-industry collaboration. A complete ecosystem will also ensure more business value is captured within the UK economy.
Globally, all developed nations recognise the fundamental importance of semiconductors to their economies and provide support through various government interventions.
The UK already has valuable skill sets and innovations across many key areas and we believe that the following measures, together with the several more outlined in this document will significantly advance the sector, enabling our businesses to compete globally and ensure the UK remains a serious player on the world stage. ● Support with CapEx for semiconductor manufacturers and fabless chip companies to upgrade existing or build out new facilities or to invest in new disruptive roadmaps to remain competitive globally. ● Incentivise the domestic market to create local supply chains to build national resilience and retain more value within the economy. Making interventions dependent on domestic supply will increase local collaboration and industry critical mass. ● Increase the supply of truly patient / long- term capital from investors with real-world semiconductor experience and understanding. Doing this in the UK is imperative, not least to reduce the number of businesses being acquired by overseas owners.
What are your predictions for the UK semiconductor market in 2024? There is a global slowdown in demand right now, but don’t be fooled by media predictions. The market will recover through 2023E and into the 1st half of 2024, fuelled by NetZero, EV’s and AI. Also, geopolitics will become ever more intertwined with business and technology news and events.
Globally, the trends to watch are heterogenous 3D chip packaging aka ‘Chiplets’ as we move away from bigger, faster chips on smaller wafer geometries (e.g. the massive Apple iPhone chips being built in $100bn Taiwanese fab’s), photonics and quantum (chips, computers, telecom’s and crypto) and the UK has advanced research activities in all these areas, from Scotland to Wales and everywhere in-between. But our challenge is to ensure that we turn these innovations into long-term sustainable businesses with the ability to ship product. Globally, the semiconductor, electronics and tech sectors are at a massive inflection point in technology, business and politics and, therefore, there is a unique opportunity for the UK to build a semiconductor industry which competes on a global scale going forward with the right support from government.
2024 might just be the start of that process.
https://www.techworks.org.uk/ semiconductor-leadership-group
Components in Electronics December/January 2024 19
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