Tech bosses have hit out at the government’s landmark £1bn semiconductor strategy, blasting it as “a drop in the ocean” which leaves the UK “very vulnerable”.
Founders warned the government’s proposals for investment over the next decade to boost the UK’s domestic silicon chip and compound semiconductor production were “disappointing”, with the announced £1bn funding paling in comparison to the figures being pledged by other countries.
Manufacturing the chips – which power everything from LED bulbs to mobile phones and quantum computers – is a key global industry, with supply chains currently the subject of fears over any potential future conflict between China and Taiwan.
Rishi Sunak today unveiled what he said was a twenty-year strategy including a collaboration with Japan, while in Tokyo ahead of a G7 meeting.
Plans involve investing in a new UK national semiconductor infrastructure initiative, with further announcements on support for manufacturing set to come this autumn.
A new UK semiconductor advisory panel will be formed; a specialist incubator pilot launched; and industry-led skills and learning programmes offered.
Meanwhile, additional guidance and international collaboration will take place on supply chain resilience and national security issues, including screening out potentially risky investors.
It comes after the PM announced he wanted the UK to become a global technology superpower.
But speaking exclusively to City A.M . several top dogs at key firms in the sector warned the UK would need to do more and go further to make headway.
Mark Dickinson, chief executive at Intrinsic Semiconductor Technologies, said: “It’s very disappointing to see the level of investment in semiconductors is less than a third of that of the US and the EU, relative to GDP.
“This leaves the UK in a very vulnerable position regarding semiconductors both in terms of security of supply and advancement in R&D. We will be left behind in this critical sector of the economy.”
‘Incredibly small amount of money’
Meanwhile, Ben White, founder of Phlux Technologies, warned: “The £1bn the UK is putting in is a drop in the ocean compared to other countries that have really taken their semiconductor strategy seriously.
“We obviously don’t have the firepower to match the US or the EU but if the UK is serious about this, then, unfortunately it’s just an incredibly small amount of money.
“They’ve invested £753m in the last ten years – to invest only £1bn over the next isn’t really an uplift, it’s just a maintaining of pace if anything, considering inflation on that number.
“It’s very disappointing on that front considering the amount of great technology the UK has in this space.”
Nigel Toon, Graphcore chief executive, however, welcomed the strategy, though he stressed the level of investment and timescales were “at a modest level compared to much larger investments in other countries, including direct competitors Germany, South Korea and Japan”.
White lauded the government’s focus on “niche, important” compound semiconductors – which are not made of silicon – and said the UK was a “world superpower” with “genuine world-leading technology” in this area.
“It’s not just the catchphrase they like to say, it is actually true – we’re one of those companies so I can attest to that,” he said.
But on national security issues – a key strand of the strategy – he warned that the government had “further muddied the water, rather than clarified it”.
“Creating sovereign capability is a fine balance to be struck,” White said.
“You need to be internationally competitive. If you’re looking to gain investment and can’t sell the company to various different entities it could make things much more difficult.
“We need an answer on what the strategy is – what if Huwawei wanted to buy a UK company? What is the protocol?”
‘World-leading semiconductor industry’
Sunak said: “Semiconductors underpin the devices we use every day and will be crucial to advancing the technologies of tomorrow.
“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.”
DSIT secretary Chloe Smith added: “Semiconductors are the beating heart of all electronic devices.
“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 national security and cement the UK’s status as a global science and technology superpower.”