The UK’s Rising Stake in Semiconductors

Photo by L N on Unsplash.

Last year, the UK government, through the UK Research and Innovation’s programme Strength in Places, granted CSconnected £43.7 million to form “the world’s first Compound Semiconductor Cluster.”

The cluster is a consortium of organisations directly involved with the research, development, and manufacturing of compound semiconductors, which power most technological devices. The programme aims to develop new supply chains for unmanned aerial vehicles and new packaging platforms for emerging communications applications. This funding comes three years after the Cardiff Capital Region cabinet was awarded a £37.9 million investment, this time to establish an advanced semiconductor foundry.

Of course, the UK has been producing semiconductors for more than 50-years, which started with a collaboration in 1957 that led to the production of the world’s first Integrated Circuit. However, despite the head start, the UK is far from a major player in the semiconductor industry. In fact, it is responsible for only 0.86% of semiconductor imports and 0.81% of semiconductor device exports globally.

A problem and opportunity is also presented by today’s global shortage of semiconductor chips. The pandemic may be one reason, as quarantined consumers greatly increased the demand for the technology. Moreover, when automotive sales declined, chip manufacturing was decreased — only for demand to spike again unexpectedly, catching chip suppliers off-guard and causing a global semiconductor race.

Other Europe member nations have also shared their vision to increase their market share from 10% to 20% of the world’s total by 2030. But because the UK officially left the European Union this year, they won’t be included in the scheme, leaving the industry — as well as the markets that rely on its production — vulnerable to uncertainties. Moreover, because of an increased demand in semiconductors from multiple industries, manufacturing concerns surfaced, leading to political disputes. Right now, a good number of Chinese companies are developing their own supply of semiconductors after the US’s restriction from using their components to manufacture chips for the technology brand Huawei.

That is why the UK government is now acknowledging that the semiconductor industry is of vital importance and must be nurtured and invested in — especially in the months to come. The presence of ARM, a British multinational semiconductor company considered as the “crown jewel” of UK tech, gives the state a huge advantage, as it showed great potential even back in 2011. However, while ARM’s processors have long been dominating the mobile and embedded market, these new challenges require new and evolving solutions.

In response, electronics production teams are finding new ways to enhance design efficiency to speed up production times and reduce costs through hierarchical schematics and improved collaboration systems. In addition, a new fabrication plant with state-of-the-art facilities can be built locally, but this requires deals with corporate partners and opens up possibilities for failed investments. But because it will take time, the already existing microchip factories can also be expanded. This is already the case with Newport Wafer Fab, which plans on doubling their manufacturing capacity by pursuing expansion. Unfortunately, with a national debt reaching £2.1 trillion, an expensive misstep in betting on semiconductors is probably the last thing the UK needs right now.