The UK Semiconductor Industry at a Critical Juncture
The UK semiconductor industry is at a critical juncture, with techUK urging the government to act to maintain its global competitiveness.
Laura Foster, Associate Director of Technology and Innovation at techUK, said: "The UK has a unique opportunity to lead in the global semiconductor landscape, but success will require bold action and sustained commitment."
UK Semiconductor Industry Strengths and Challenges
The UK has long been a leader in semiconductor design and intellectual property (IP), with Cambridge in particular serving as a global hub for innovation. Companies like Arm, which designs chips used in 99% of the world’s smartphones, exemplify the UK’s strengths in this area. However, a techUK report warns that these strengths are under threat due to insufficient investment, skills shortages, and a lack of tailored support for the sector.
A Fundamental Need for Strategic Investment and Innovation
The report makes 27 recommendations across six key areas, including design and IP, R&D, manufacturing, skills, and global partnerships.
- Turn current strengths into leadership: The UK must leverage its existing capabilities in design, IP, and compound semiconductors. This includes supporting regional clusters like Cambridge and South Wales, which have proven track records of innovation.
- Establishing a National Semiconductor Centre: This would act as a central hub for the industry, providing support for businesses, coordinating R&D efforts, and fostering collaboration between academia and industry.
- Expanding R&D tax credits: The report calls for the inclusion of capital expenditure in R&D tax credits to incentivise investment in new facilities and equipment.
- Creating a Design Competence Centre: This would provide shared facilities for chip designers, reducing the financial risk of innovation and supporting the development of advanced designs.
- Nurturing skills: The UK must address the skills shortage in the semiconductor sector by upskilling workers, attracting international talent, and promoting STEM education.
- Capitalising on global partnerships: The UK must strengthen its position in the global semiconductor supply chain by forming strategic partnerships with allied countries.
Urgent Action is Required to Secure the UK Semiconductor Industry
The report warns that the UK risks falling behind other nations if it does not act quickly. Countries like the US, China, and the EU have already announced significant investments in their domestic semiconductor industries.
Conclusion
The UK’s semiconductor industry has the potential to be a global leader, but this will require sustained investment, strategic planning, and collaboration between government, industry, and academia. The UK Government should look to its semiconductor ambitions as an essential part of delivering the wider Industrial Strategy and securing not just the fastest growth in the G7, but also secure and resilient economic growth.
FAQs
Q: What is the current state of the UK semiconductor industry?
A: The UK has a unique opportunity to lead in the global semiconductor landscape, but success will require bold action and sustained commitment.
Q: What are the strengths of the UK semiconductor industry?
A: The UK has a strong presence in design and intellectual property (IP), with companies like Arm and other notable clusters in Cambridge and South Wales.
Q: What are the challenges facing the UK semiconductor industry?
A: The industry faces challenges such as insufficient investment, skills shortages, and a lack of tailored support for the sector.
Q: What are the recommendations of the techUK report?
A: The report makes 27 recommendations across six key areas, including design and IP, R&D, manufacturing, skills, and global partnerships.
