The UK government is hoping to move the needle on its drive for semiconductor production, with a new inquiry and a new civil service semiconductor advisor role – even as UK semiconductor strategy flounders.
Semiconductor production is seen as a priority for the UK, as both Europe and the US also struggle to gain back a share of the increasingly critical industry from Asia. But while the EU and US government have announced concrete plans to spend billions on developing new fabs in the wake of global chip shortages, a detailed UK semiconductor strategy has yet to crystallise — and British chip firms continue to sell to foreign buyers.
See also: Chip sales hit $151 billion in Q1
The Department for Digital, Culture, Media and Sport (DCMS) is now hiring a Senior Policy Advisor for Semiconductors as part of its Economic Security Unit (alongside a similar role focused on AI and DeepTech).
The civil servant, earning up to £58,000, will “lead on the development of the UK’s domestic sectoral strategy, requiring” the government said: “You’ll be working across Whitehall to prioritise DCMS interests on a priority topic for Government, engaging with external experts and businesses to develop HMG positions and implement them effectively…requiring strong analytical rigour and excellent working relationships.”
Separately, the Business, Energy and Industrial Strategy (BEIS) Committee has launched an inquiry into the UK semiconductor strategy – or its lack of one that no single modest appointee will be able to surmount. The committee is currently calling for evidence – interested parties can make a submission until 14 June 2022.
“Semiconductors are growing in technological and geopolitical importance…”
“With scarce global supply, it’s essential that we conduct a stock take of the UK’s capacity and what Government can do to raise it,” said Darren Jones MP, chair of the BEIS committee.
“We want to hear from industry, academics and experts to get a better picture of the UK semiconductor landscape here at a time when there are concerns over the future of global supply chains.”
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It is perhaps revealing that two separate government departments – DCMS and BEIS – are somehow both responsible for the UK semiconductor strategy. And while it’s DCMS which is currently hiring for a semiconductor policy advisor, it’s BEIS which has to make decisions about the UK’s semiconductor production facilities – particularly, at the moment, Newport Wafer Fab (NWF).
The South-Wales-based NWF, a maker of commodity chips and the UK’s largest semiconductor producer, has come in for international scrutiny following its takeover by Nexperia, part of Chinese firm Wingtech. Business secretary Kwasi Kwarteng is currently considering whether to force Nexperia to roll back its buyout of NWF on national security grounds.
Despite the sale of NWF being raised by US Republican congressmen as a national security issue, and anger from some British MPs, the UK’s own national security advisor, Stephen Lovegrove, was reported to have approved NWF’s takeover by Nexperia. Days later though, the Foreign Affairs Committee said Lovegrove’s review appeared not to have started.
Following a rather tepid response from the government in April, last week Kwarteng said there would be a “full assessment” of the NWF takeover under the National Security and Investment Act.
Presumably this is different to the previous review by Lovegrove.
Alongside this decidedly incoherent handling of one sale, there is a vigorous debate about what the UK semiconductor strategy should actually be. One answer would seem to be investment in the physical fabrication plants needed to make cutting-edge chips – a strategy which would require billions of pounds in long-term investment, along with partnerships with companies such as Intel.
See also: Record 1 trillion semiconductors shipped
Currently the UK is home to 23 fabrication plants, mostly producing chips based on older processes – and certainly nothing close to the cutting-edge 5nm fabs used by TSMC and others. According to IP firm Aalbun the cost of building a fab with the latest technology could be as high as $20 billion – just less than the estimated cost of the UK’s Sizewell C nuclear power station.
An opposing view is to focus not on the physical production of chips, but on their design. A report published earlier this month from Global Counsel and Imagination Technologies, a British semiconductor design firm owned by Canyon Bridge Capital Partners, a Chinese government-owned investment fund, argues for exactly this.
“The semiconductor supply chain involves more than just manufacturing; an extended process of research and development, commercialisation and design must take place before chips can be physically fabricated. It is in these areas where the UK excels, and where its future role in the global value chain for semiconductors lies,” said the report.
Currently the UK boasts significant expertise in chip design, being home to ARM as well as Imagination Technologies and Alphawave. But critics might suggest designing chips does little good if vital industries can’t access the physical devices.
Whichever route the government chooses for the UK semiconductor strategy, it is clear the country is lagging behind both the US and EU. The government will need to develop a coherent vision for the country’s approach to chip design and/or production – in contrast to the extremely muddled and incoherent approach currently in place.
It is in this context that DCMS’s new policy advisor will be working on the UK semiconductor strategy. Applications close 12 June 2022 – if you still want the job.