Raising Awareness
It is crucial to raise awareness among parliamentarians and peers about the strategic importance of the semiconductor industry to the UK’s economy, security, and technological advancement.
With global supply chain vulnerabilities and geopolitical tensions, ensuring the UK’s sovereignty in semiconductor production has never been more urgent. Raising awareness will not only ensure that the government prioritises investment and policy development but also foster greater understanding of the challenges and opportunities in this sector. This is vital for shaping informed decisions that will strengthen the UK’s position on the global semiconductor stage.
Our Key Recommendations
The All-Party Parliamentary Group (APPG) for Semiconductors, in consultation with its Advisory Board, recommends the following actions to strengthen the UK’s semiconductor sector:
Governance
1. Develop and implement a clear standalone Semiconductor Strategy, either as part of the Industrial Strategy or as a separate strategy that underpins it. This should build on DSIT’s work over the past three years and utilise collected data.
2. Establish an independent National Semiconductor Institute to lead policy development, coordinate international relationships, and advise the government. Similar models exist in other sectors, such as the Aerospace Institute and the Advanced Propulsion Centre.
3. Create an ‘Office for Semiconductors’ within the government to enhance cross-departmental understanding of UK semiconductor capabilities, global supply chain complexities, and sovereign needs.
Scale-Up
4. Transform the funding ecosystem to support early-stage company growth and encourage investment in established businesses. This aligns with calls for three £100m funds, a £1bn blitz fund, and the expansion of the Chip Start program, as well as a themed investment fund to support long-term high-value semiconductor manufacturing investments.
5. Adopt Important Projects of Common European Interest (IPCEI) principles in intervention policy to avoid placing UK industry at a disadvantage. A dedicated industrial scale-up fund is needed, matching support levels of up to €1bn per IPCEI project seen in individual EU nations.
Commercialisation
6. Expand support for Semiconductor Investment Zones, offering incentives for start-ups and foreign direct investment (FDI) aligned with regional semiconductor strengths (e.g., Wales: advanced manufacturing, Scotland: photonics, Northern Ireland: magneto-optical storage, North East: RF systems, South West: digital, quantum, and cybersecurity).
7. Enhance government procurement strategies to leverage semiconductor innovation for key sectors such as defence, security, healthcare, energy, communications, aerospace, and smart cities.
8. Establish an ‘Open Access’ device foundry model to bridge the ‘valley of death’ in semiconductor commercialisation, enabling UK design companies to develop and scale products domestically.
Research, Development & Innovation (R,D&I)
9. Increase support within the EPSRC portfolio, with additional funding for Manufacturing Hubs, National Research Facilities, and World-Class Labs. Strengthen links between semiconductor physics, materials science, and advanced applications.
10. Launch an ‘Assured Supply Chain Innovation Programme’ (ASCIP) to support sovereign capability in key areas such as defence, communications (Optical and 5/6G), NetZero power solutions, healthcare, and quantum technologies.
Skills
12. Develop a comprehensive skills framework, from school education to career transition programs. Establish a National Semiconductor Skills Academy (NSSA) focused on Continuing Professional Development (CPD) and workforce cross-training, alongside outreach initiatives to connect industry with education.
UK Resilience & Export Opportunities
13. Designate semiconductor technology as a ‘National High Potential Opportunity,’ with targeted export and investment strategies led by DSIT. Integrate semiconductor promotion into a ‘Global High-tech Britain’ brand, build global partnerships, and secure bilateral supply agreements to address vulnerabilities.