International Cooperation
The Global Opportunity
The semiconductor industry is projected to exceed $1 trillion annually by 2030, driven by growth in computing, communications, automotive, and industrial electronics. Supply chains are highly complex and segmented across design, materials, wafer and chip fabrication, testing, and subsystem integration. The industry operates through a mix of specialised foundry services and vertically integrated manufacturers.
Balance of trade
HMRC data indicates rising UK semiconductor imports, averaging £2.8B per year, while exports stand at £2.7B per year. Between 2019 and 2023, exports of semiconductor manufacturing machinery, inspection and testing equipment, transistors, and diodes grew at a compound annual rate of 12%.
The UK’s strengths in silicon design IP, capital equipment manufacturing, compound semiconductors, and emerging technologies present significant opportunities to boost exports and achieve a positive trade balance.
Geopolitical Tensions
Post-COVID semiconductor shortages have heightened the global focus on securing supply chains. Major economies are investing heavily in semiconductor innovation and manufacturing to strengthen domestic supply and drive advancements in AI, communications, defence, and sustainability. US-China tensions over Taiwan, coupled with the Russia-Ukraine conflict, have underscored the strategic importance of semiconductor independence.
With the threat of a Chinese blockade on Taiwanese exports, increasing US tariffs, and the need to enhance UK defence capabilities, meaningful investment in the UK semiconductor sector is critical. Targeted efforts should focus on expanding domestic production, securing international partnerships, and accelerating innovation to safeguard the UK’s position in the global semiconductor landscape.