Quantum Computing

UK Government Launches £1 Billion Strategy for UK Semiconductor Sector

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Insider Summary

  • The National Semiconductor Strategy unveiled plans to emphasize advanced chip design, research, and leadership.
  • Governments will invest up to £1 billion over the next decade to improve access to infrastructure, empower more research and development and facilitate greater international cooperation, up to £200 million over 2023-2025.
  • The plan sets out how the UK will build industrial strength, protect supply chains from disruption and protect technology from national security risks – supporting the delivery of the government’s priority to growing the economy.

PRESS RELEASE — The UK Government today released its new National Semiconductor Strategy, a 20-year plan to secure the UK’s world-leading semiconductor industry.

That National Semiconductor Strategy sets out how up to £1 billion of government investment will increase British strength and skills in design, R&D and semiconductor compounds, while helping to grow domestic chip companies across the UK.

Working closely with industry, the investments made by the government will drive research, innovation and commercialization through the sector – helping to get products from the lab to market.

It comes while the Prime Minister is in G7 Leaders summit in Japan for discussions on strengthening our technology collaboration with like-minded economies and strengthening supply chains for critical technologies such as semiconductors.

Semiconductors are essential to the modern world we live in, being a critical component for the functioning of nearly every electronic device we use. From cell phones and computers to ventilators and power generators, nearly every technology in the world depends on them.

More than one trillion semiconductors are produced annually, with an estimated global semiconductor market to reach a total market size of $1 trillion by 2030. Semiconductors also power tomorrow’s technologies, such as artificial intelligence, quantum, and 6G.

This strategy focuses on the UK’s specific areas of strategic advantage in the semiconductor sector – semiconductor design, advanced compound semiconductors and our world-leading products. R&D ecosystem – supported by UK universities from Cambridge to Cardiff and Manchester to Edinburgh who are demonstrating global leadership in this field.

Compound semiconductors do things silicon chips can’t, with use cases in emerging technologies like autonomous driving and future telecommunications. Their creation required expertise in advanced materials, an area of ​​British science leadership.

To support the sector’s growth in the UK, the government will invest up to £200 million over 2023-2025 to improve industry access to infrastructure, empower 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 actions to secure the UK’s advantage in this globally important sector and meet 3 main objectives:

  • grow the domestic sector
  • reduce the risk of supply chain disruptions
  • protect our national security

This strategy builds on the government’s consistent support for the semiconductor industry, having provided grants of £539 million for research and £214 million directly to UKM in the sector over the past 10 years, as well as funding 450 PhDs student since 2017.

Prime Minister Rishi Sunak said:

Semiconductors underpin the devices we use every day and will be essential to advancing future technology.

Our new strategy focuses our efforts where our strengths lie, in areas such as research and design, so that we can build our competitive advantage on the global stage.

By leveraging 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.

Secretary for Science, Innovation and Technology Chloe Smith said:

Semiconductors are at the heart of all electronic devices, from powering cell phones and cars to medical devices and innovative new technologies such as quantum and AI that will make a real difference to all of our lives.

The UK is already a world leader in semiconductor technology research and design – our new strategy will leverage these core strengths to create more skilled jobs, grow our economy, enhance our national security and strengthen Britain’s status as a global science and technology superpower.

The United Kingdom Unified Review places the safeguarding of strategic advantage in science and technology at the heart of Britain’s national security and foreign policy. In recognition of the importance of semiconductor technology in this area, the National Semiconductor Strategy demonstrates a clear vision for our position in this sector.

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

In Hiroshima this week, the UK and Japan committed to an ambitious semiconductor partnership, led by the UK’s Department of Science, Innovation and Technology (DSIT) and the Japanese Ministry of Economy, Trade and Industry (PUT). It seeks to provide a new one R&D cooperation, exchange of skills, and enhancing the resilience of semiconductor supply chains for the two countries.

UK Research and Innovation will work with the Japan Science and Technology Agency on a co-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 establishing a new UK Semiconductor Advisory Panel. The panel will bring together key figures from industry, government and academia to work together on joint solutions and implementation.

Growing British industry

The government will focus on growing the UK’s unique strengths and already a world leader in semiconductor compounds, research and development, intellectual property and design by investing up to £200 million over 2023-2025, and up to £1 billion in the following year. decade. This funding will be used to improve talent pipelines and will make it easier for UK companies to access things like prototyping, tools and business support.

This effort will include investment in a new National Semiconductor Infrastructure Initiative to unlock the potential of UK chip companies in this key area. It will see whether better access to prototyping facilities for chip companies is necessary to overcome innovation barriers and grow the industry. It will also explore opportunities to make specialist software tools more available to start-ups. Department of Science, Innovation and Technology assigned research who will look at how best to build Infrastructure initiatives. It will report its findings in the fall.

In addition, the government will announce plans in the fall to support investments in the semiconductor manufacturing sector, particularly where they are critical to the UK’s technology ecosystem or UK national security.

Further announcements include:

  • New UK Semiconductor Advisory Panel bringing together key figures from industry, government and academia to work together to deliver strategy. The Advisory Panel will speak on behalf of the sector and provide advice and feedback
  • specialist incubator pilots will focus on removing the barriers that hinder the growth of semiconductor startups. The scheme, launched today, will give the industry better access to technical as well as coaching resources and networks
  • support for industry-led learning will ensure people can gain the skills the semiconductor industry needs. Programs will provide learning opportunities that focus on the advanced skills required for the sector, such as electrical and electronic engineering and computer science

Securing the supply chain

The journey of a semiconductor chip from lab to market can involve thousands of stages of production that occur around the world, with various locations having highly concentrated production capabilities.

The spike in demand for consumer electronics during the pandemic shows how the global industry can be affected by semiconductor supply issues. This strategy highlights the importance of collaboration with international allies to develop secure supply chain resilience.

The government will take steps to help the sector mitigate the impact of future supply shortages. The UK government also wants to protect critical sectors (essential services, health care, infrastructure and critical national defense) from disturbances that could pose a risk to life, or national security. To help ensure the UK is better protected from future harm, the government is committed to:

  • New guidelines will be published to help businesses better understand the risks and steps they can take to become more resilient to supply chain shocks
  • ongoing collaboration through international initiatives – such as the UK technology partnership with the US, Japan and the Republic of Korea – to explore common approaches and solutions to increase the resilience of global supply chains

Protect Britain from security risks

Semiconductors can create vulnerabilities in the electronic devices they are used in, and these risks are becoming more significant as the use of internet-connected devices increases. The government is clear that compromising the cybersecurity of the hardware behind every device that supports modern life is unacceptable. Acquisitions of chip companies can also raise national security concerns. The strategy announced actions to protect the UK from these security risks include:

  • additional information on the government’s approach to using the National Security and Investment Act, providing information to the industry on what areas of the sector the government has the potential to raise specific concerns about to ensure technology remains safely protected
  • the government will continue to support world-leading programs such as Digital Security by Designwhich aims to make semiconductors more resilient and secure in the face of ever-increasing cyber threats

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