Government lifts chip strategy with a bit more cash

agsandrew – stock.adobe.com

Unlike the EU and US, the UK government appears to be taking its time on providing a large cash injection to build out the UK semiconductor sector

Cliff Saran,
Managing Editor

Published: 28 Mar 2024 16:45

The government has unveiled £16.6m of funding, which it said has been earmarked for the development of semiconductors that power electric cars and the green energy industry.

The funding aims to provide semiconductor researchers and businesses access to new equipment helping them test and make chips for use in high-energy machines. The government has targeted £14m of the funding for semiconductors used in “power electronics”, which is where chips convert and control power in energy-intensive machines, including electric vehicles and manufacturing equipment.

The Department for Science, Innovation and Technology (DSIT) said the new tools, based predominantly in Newcastle and Strathclyde, will help researchers and businesses test applications of new innovations in power electronics and improve their semiconductor packaging processes.

The investment, which is part of the UK’s Semiconductor Strategy, is designed to encourage innovations in advanced packaging, can help to reduce the power consumption and cooling requirements of semiconductors.

Technology minister Saqib Bhatti said: “This investment in open-access technology will make sure British researchers have the tools they need to rapidly turn semiconductor science into business reality, all while making hugely energy-intensive sectors more sustainable.”

The open-access tools cover a range of processes involved with designing and testing these semiconductors, including “slicing” silicon wafers into smaller chips and bonding complex materials together to make chips.

The government said the funding will also be used to help manufacturers improve the technology used to automate assembly processes.

There have been a number of funding boosts during the past few months, aimed at improving the UK’s semiconductor sector. But these fall far short of the $50bn set aside in the US or €47bn of European Union funding for developing the chip sector.

Earlier in March, the government announced the UK had joined the Chips Joint Undertaking (Chips JU), a European initiative to access a €1.3bn Horizon Europe funding pot for collaborative semiconductor research projects up to 2027. In February, it unveiled two £11m Innovation and Knowledge Centres in Southampton and Bristol, and £4.8m funding for semiconductor skills projects.

While these initiatives help, Russ Shaw, founder of Tech London Advocates, is not convinced the funding is sufficient. Tech London Advocates (TLA) leads the Chips Coalition and works alongside TechWorks and techUK, driving the importance of semiconductors in the success of the UK tech sector.

Shaw sees a need for policymakers to look at the full semiconductor value chain. “We need to look at the entire value chain,” he said. “We’re not going to build the high-end fabs, but we are going to have some capability here that we can rely on.”

Shaw believes the government is holding back major funding of the semiconductor until it sees concrete evidence that large semiconductor businesses want to participate.

Looking at a hypothetical example, he said: “Let’s say a Taiwanese company comes here wanting to build a UK fab with a consortium of three or four UK companies. If we asked the UK government to fund 20% of the cost, I think it would say yes.”

He urged the government to look at how to encourage talented people from around the world to study in the UK and remain here to support and build the semiconductor sector.

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