UK unveils $1.24 billion semiconductor investment plan

The UK government on Friday unveiled a £1 billion ($1.24 billion) 20-year investment strategy into semiconductors, aimed at diversifying the supply chain in an attempt to enhance security.

The Department of Science, Innovation, and Technology said the National Semiconductor Strategy "will boost the UK’s strengths and skills in design, R&D and compound semiconductors while helping to grow domestic chip firms across the UK".

"By increasing the capabilities and resilience of our world-leading semiconductor industry, we will grow our economy, create new jobs and stay at the forefront of new technological breakthroughs," Prime Minister Rishi Sunak said, according to The National.

The strategy will kick off with a £200 million investment into the sector over the next two years, aiming to eventually build capacity to create advanced compound semiconductors to be used in areas such as autonomous driving and future telecommunications.

Core strengths

"Britain is already a world leader when it comes to researching and designing semiconductor technology," said UK Science, Innovation and Technology Secretary Chloe Smith.

"Our new strategy will double down on these core strengths to create more skilled jobs, grow our economy, boost our national security and cement the UK’s status as a global science and technology superpower."

The strategy was broadly welcomed by the UK's technology sector as a first step to be rapidly built upon.

"Delivery will be key, and it is vital the government moves quickly with the industry and our international partners to turn the strategy into action," said Julian David, chief executive of the trade association techUK.

However, the £1 billion investment is a fraction of what the US and EU are planning to put behind their microchip industries.

Critics said the government's commitment amounts to less than the cost of building one semiconductor manufacturing facility.

The strategy unveiling comes in the same week that the vehicle maker Stellantis warned it could close some UK factories should the British government fail to adjust Brexit trade rules to ease the supply of batteries for electric vehicles, for which semiconductor technology is an important component.