Semiconductor strategy: £1bn for vital microchip sector under fire | business news
The government’s long-awaited national semiconductor strategy was released, met with a muted response from industry amid ongoing shortages.
Microchip makers, which make the parts needed in nearly all electronic items, welcomed the release of the strategy, but one called for more details on whether the promised £1billion will take effect and another said that so that the obstacles faced by the industry would not be removed.
It is believed that a third expect the total to be dwarfed by the funds available to businesses in the United States and European Union.
Semiconductor shortages have plagued more than a hundred industries, stop automobile production and resulting in a shortage of PlayStations. Semiconductors are dubbed the oil of the 21st century because they play a vital role in everything from cell phones to spacecraft.
As part of the strategy, the Government has pledged to invest £1bn over the next decade, with £200m to be spent from this year to 2025.
The goal is to improve skills in the industry, boost research and development, and help bring products from the lab to the market through increased innovation and commercialization of the industry.
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While the publication and commitment to growing the industry were welcomed, the content drew criticism.
“Limp, to be honest,” is how the founder of the only company in the world capable of making a device for the mass production of semiconductor chips described the contents.
“It’s far from meeting the needs of UK chipmakers,” said Dr. Simon Thomas of Paragraph.
It doesn’t address “any of the fundamental challenges faced by UK chipmakers,” added Dr. Thomas, who is also the managing director of Paragraph.
“The strategy continues the trend of this conservative government proclaiming superlatives such as ‘becoming a tech superpower’ without defining what ‘superpower’ actually means or laying out a plan for how we can even achieve that goal.”
The £1bn figure is actually not that high by industry standards, added Dr. Thomas added.
The sum is “less than the cost of setting up a very simple microchip manufacturing facility.”
“In reality, the UK’s capital commitment is nothing more than a rounding error in this industry.”
The founder of Pragmatic Semiconductor also asked questions about the investment amount.
Scott White said further clarity was needed on “exactly what the £1billion will be used for and how and when it will be applied”.
“Looking at the areas that the UK is focusing on, the legitimate question is whether that’s enough money to make a difference – is it too dilutive to spread the amount over 10 years? That can only be answered with more details,” he said
“Ultimately, you could invest £100m a year in something that really brings something to the industry. You might as well be wasting £1billion a year focusing it on areas that aren’t having an impact.”
The government’s long-awaited plan missed its autumn 2022 deadline but has received a positive reception from some industry figures.
“These well-designed policy interventions will help UK companies drink from global fire hydrant potential as this critically important industry grows to $1 trillion by 2030,” said Silicon Catalyst’s UK Managing Partner.