According to a CNBC report quoting industry insiders, the UK's semiconductor industry is pleading with the government for financial assistance and if it doesn't act soon, it could lose its microchip companies to the U.S. and other nations.
The government of Prime Minister Rishi Sunak has not yet released a plan outlining how the United Kingdom will assist the chip industry. And the nation's semiconductor executives are becoming increasingly irritated.
A Cambridge, England-based startup called Pragmatic Semiconductor, which makes nonsilicon chips, has warned that if the government doesn't soon release a plan for the sector, it might be forced to relocate abroad.
“It has to make economic sense for companies like ours to continue to operate and manufacture here, and if there are greater potential economic benefits and governmental support packages abroad, then relocation is the only sensible business decision,” Scott White, CEO of Pragmatic Semiconductor, told CNBC.
Britain is a minor player in the global chip market, specializing in compound semiconductor design, intellectual property, research, and fabrication.
It also houses one of the most valuable semiconductor-related assets, chip designer Arm. Arm-licensed chips, which are based in Cambridge, are found in approximately 95% of the world's smartphones.
Semiconductors, and the primarily East Asian-based supply chain that supports them, have become a thorny issue for world governments following a global shortage that caused supply problems for major automakers and electronics manufacturers.
The Covid-19 pandemic exposed an overreliance on Taiwanese and Chinese semiconductor component manufacturers. With rising tensions between China and Taiwan, this reliance has become risky.
The largest manufacturer of microchips is by far TSMC, a Taiwanese semiconductor powerhouse. Many developed Western countries are envious of its chip-making prowess and are taking steps to increase domestic chip production.
If the government does not take action within the next six months, IQE, a microchip company in Newport, Wales' semiconductor "cluster," has also issued a warning that it might be forced to relocate to the U.S. or EU.
“We would love to stay in the UK and have committed to grow in the UK … but we also have to do what shareholders want and go where the money is,” Americo Lemos, IQE’s CEO, told The Times newspaper.
“We are committed to supporting the UK’s vitally important semiconductor industry. Our strategy will grow the sector further and make sure we have a resilient supply chain. The strategy will be published as soon as possible,” a government spokesperson told CNBC.
The CHIPS and Science Act, a $280 billion package that includes $52 billion in funding to increase domestic semiconductor manufacturing, was signed into law in the US by President Joe Biden.
To produce 20% of the world's semiconductors by 2030, the EU has set aside 43 billion euros ($45.9 billion) for Europe's semiconductor industry.
After being subjected to severe trade sanctions from the United States, China was also pressured to change its chip strategy. According to Reuters, the nation was reportedly putting together a package worth more than 1 trillion yuan ($147 billion) for its chip industry in December.
The lack of a comparable strategy from the government, according to UK tech industry executives, is hurting the nation's competitiveness.
They predict that the UK won't have the financial clout to match those audacious spending plans. But they remain optimistic that the nation will make investments worth millions of dollars, offer tax breaks, and make it simpler for highly skilled workers to immigrate.
“Chasing to catch up is not within the spending power of the U.K., not even remotely,” Simon Thomas, CEO of Paragraf, a British firm developing and producing graphene-based electronics, told CNBC.
The absence of a comprehensive microchip strategy was referred to as a "act of national self harm" by lawmakers on the Business, Energy and Industrial Strategy (BEIS) committee on February 3.
The government's BEIS agency was replaced on Tuesday as part of a Sunak reorganization.
Kemi Badenoch, minister for the recently established Department for Business and Trade, is now in charge of the portfolio for business and industrial strategy, while Michelle Donelan is in charge of the Department for Science, Innovation, and Technology.
In October, Sunak took office as Britain's third prime minister of the year, inheriting Liz Truss' dour economic climate.
Chip bosses are putting pressure on him to develop an industry strategy quickly.
Tech London Advocates founder Russ Shaw urged the government to "step up." Chaos has "inordinately distracted" London.
The release of a UK semiconductor strategy was anticipated for last year. But because of the unrest in politics, there have been numerous delays. To support its semiconductor industry, the government has previously proposed, among other initiatives, the creation of a national institution.
“The rumors I’ve heard is [it may arrive] any day now,” Chris Ballance, co-founder of U.K. quantum computing startup Oxford Ionics, told CNBC. However, he added the process had been “going on for the last four or five months.”
(Source:www.cnbc.com)
The government of Prime Minister Rishi Sunak has not yet released a plan outlining how the United Kingdom will assist the chip industry. And the nation's semiconductor executives are becoming increasingly irritated.
A Cambridge, England-based startup called Pragmatic Semiconductor, which makes nonsilicon chips, has warned that if the government doesn't soon release a plan for the sector, it might be forced to relocate abroad.
“It has to make economic sense for companies like ours to continue to operate and manufacture here, and if there are greater potential economic benefits and governmental support packages abroad, then relocation is the only sensible business decision,” Scott White, CEO of Pragmatic Semiconductor, told CNBC.
Britain is a minor player in the global chip market, specializing in compound semiconductor design, intellectual property, research, and fabrication.
It also houses one of the most valuable semiconductor-related assets, chip designer Arm. Arm-licensed chips, which are based in Cambridge, are found in approximately 95% of the world's smartphones.
Semiconductors, and the primarily East Asian-based supply chain that supports them, have become a thorny issue for world governments following a global shortage that caused supply problems for major automakers and electronics manufacturers.
The Covid-19 pandemic exposed an overreliance on Taiwanese and Chinese semiconductor component manufacturers. With rising tensions between China and Taiwan, this reliance has become risky.
The largest manufacturer of microchips is by far TSMC, a Taiwanese semiconductor powerhouse. Many developed Western countries are envious of its chip-making prowess and are taking steps to increase domestic chip production.
If the government does not take action within the next six months, IQE, a microchip company in Newport, Wales' semiconductor "cluster," has also issued a warning that it might be forced to relocate to the U.S. or EU.
“We would love to stay in the UK and have committed to grow in the UK … but we also have to do what shareholders want and go where the money is,” Americo Lemos, IQE’s CEO, told The Times newspaper.
“We are committed to supporting the UK’s vitally important semiconductor industry. Our strategy will grow the sector further and make sure we have a resilient supply chain. The strategy will be published as soon as possible,” a government spokesperson told CNBC.
The CHIPS and Science Act, a $280 billion package that includes $52 billion in funding to increase domestic semiconductor manufacturing, was signed into law in the US by President Joe Biden.
To produce 20% of the world's semiconductors by 2030, the EU has set aside 43 billion euros ($45.9 billion) for Europe's semiconductor industry.
After being subjected to severe trade sanctions from the United States, China was also pressured to change its chip strategy. According to Reuters, the nation was reportedly putting together a package worth more than 1 trillion yuan ($147 billion) for its chip industry in December.
The lack of a comparable strategy from the government, according to UK tech industry executives, is hurting the nation's competitiveness.
They predict that the UK won't have the financial clout to match those audacious spending plans. But they remain optimistic that the nation will make investments worth millions of dollars, offer tax breaks, and make it simpler for highly skilled workers to immigrate.
“Chasing to catch up is not within the spending power of the U.K., not even remotely,” Simon Thomas, CEO of Paragraf, a British firm developing and producing graphene-based electronics, told CNBC.
The absence of a comprehensive microchip strategy was referred to as a "act of national self harm" by lawmakers on the Business, Energy and Industrial Strategy (BEIS) committee on February 3.
The government's BEIS agency was replaced on Tuesday as part of a Sunak reorganization.
Kemi Badenoch, minister for the recently established Department for Business and Trade, is now in charge of the portfolio for business and industrial strategy, while Michelle Donelan is in charge of the Department for Science, Innovation, and Technology.
In October, Sunak took office as Britain's third prime minister of the year, inheriting Liz Truss' dour economic climate.
Chip bosses are putting pressure on him to develop an industry strategy quickly.
Tech London Advocates founder Russ Shaw urged the government to "step up." Chaos has "inordinately distracted" London.
The release of a UK semiconductor strategy was anticipated for last year. But because of the unrest in politics, there have been numerous delays. To support its semiconductor industry, the government has previously proposed, among other initiatives, the creation of a national institution.
“The rumors I’ve heard is [it may arrive] any day now,” Chris Ballance, co-founder of U.K. quantum computing startup Oxford Ionics, told CNBC. However, he added the process had been “going on for the last four or five months.”
(Source:www.cnbc.com)
