Where is the UK's semiconductor plan?

With the advent of the Internet of Things (IoT), semiconductors are being use in applications that we’d never have imagined before. There are also other major factors contributing to this boom, for example, the automotive industry has seen the number of semiconductors required for vehicle manufacture rise to around 1,000 ICs for a non-electric vehicle and double that for EVs. The market for semiconductors is booming. Even though next year is expected to show a small drop, it is only in comparison to the record demand during the COVID-19 pandemic, where demand was so high that there was a global shortage of chips. The breakdown in the global supply chain that the pandemic set off has prompted a wave of change around the world as countries move to secure their own supplies of semiconductors by encouraging their development and manufacture closer to home. Both the US and the EU have implemented their own “CHIPs” acts that will provide funding to companies to expand chip building capabilities in their respective regions.

Where is the UK in all of this? Since Brexit, the UK has distanced itself from almost all of the EU’s institutions and initiatives, even if it is to the country’s own detriment. The UK government has not laid any plans out on how it sees the industry. A report on the future of the UK semiconductor industry that was due to be published this autumn is still not available. Just after the Brexit vote, there was a lot of talk about the UK boosting science and technology spending, and there was even a government committee created to oversee the strategy. That seems to have been put on a back burner as prime ministers have come and gone.

Just recently, the UK government stopped Nexperia’s takeover of the UK’s biggest fab in Newport due to security concerns. This is despite two previous reviews of the takeover clearing the company and Nexperia’s promise of far reaching remedies to those concerns. As well as trying to buy the fab, Nexperia was already its biggest customer. If the company decides to build elsewhere to increase its capacity, which it obviously requires, then the fab’s future could be in doubt. What makes the government’s decision more perplexing is that Nexperia already owns a facility in Manchester.

As I said at the start of this blog, semiconductors are penetrating areas that they never have before. Almost all products rely on ICs to function now. Future disruptions in the supply chain could be detrimental to the whole of the UK’s manufacturing industry, which is already beleaguered from the fallout from bothCOVID19 and Brexit, unless the government takes action. Rivals in the EU are moving ahead and gaining billions of dollars of inward investment from both the US and Asia and the UK is in danger of getting left behind.