Semiconductor strategy: £1bn for vital microchip industry faces criticism | Business news

The government’s long-awaited National Semiconductor Strategy has been unveiled, but there has been a lukewarm response from the industry amid persistent shortages.

Manufacturers of microchips, which make the parts needed for nearly all electronics, welcomed the announcement of the aid package, but one demanded more details on whether the promised £1bn would work and another said it failed to address the challenges facing the industry. obstacle.

Another firm is understood to believe the funding will pale in comparison to what is available to US and EU companies.

Semiconductor shortages plague more than 100 industries, Stop making cars And lead to the scarcity of PlayStation. Semiconductors have been described as the oil of the 21st century because they play an integral role in everything from cell phones to spaceships.

As part of the strategy, the government has committed to investing £1 billion over the next decade, including £200 million from this year to 2025.

The aim is to improve skills in the industry, promote research and development, and help bring products from the laboratory to the market by increasing innovation and commercialization in the industry.

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While the publication and commitment to growing the industry has been widely welcomed, its content has been criticized.

“Pretty frankly weak” is how the founder of the only company in the world that can manufacture the components needed to mass produce semiconductor chips describes it.

“There is still a long way to go to address the needs of UK chipmakers,” said Paragraf’s Dr Simon Thomas.

Dr Thomas added that it did not address “any of the fundamental challenges facing UK chipmakers”.

“The strategy continues the trend of this Conservative government, which declares that the superlative phrase is ‘become a technological superpower’, but fails to define what ‘superpower’ actually means, or how we will begin to achieve this goal.” plan”.

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UK needs ‘bold’ semiconductor strategy

By industry standards, the actual figure of £1bn is not that large, he said.

The sum is “less than the cost of setting up a very basic microchip fabrication plant”.

“In reality, the UK’s capital commitment is nothing more than a rounding error in the industry”.

Pragmatic Semiconductor’s founder also raised questions about the amount invested.

Scott White said there needed to be more clarity on “what exactly the £1bn is used for, and how and when”.

“When you look at the areas of concern in the UK there is a valid question to ask is is the money enough to make an impact – is it too dilute to spread the money out over 10 years? That can only be answered with more details,” he said

“At the end of the day, you can invest £100m a year in something that really drives the industry forward. You can equally waste £1bn a year and focus it on areas that aren’t going to have an impact.”

The government’s long-awaited plan missed its fall 2022 deadline, but received a positive response from some in industry.

Silicon Catalyst’s UK managing partner said: “As this vital industry grows to $1 trillion by 2030, these deliberate policy interventions will help UK companies capitalize on opportunities from global fire hydrants.”

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