UK plans £1bn semiconductor investment in new strategy

LONDON, May 19 (Reuters) – Britain announced a £1 billion ($1.26 billion) investment for its semiconductor sector on Friday in a long-awaited strategy aimed at strengthening the domestic chip industry and supply chains. .

The strategy focuses on Britain’s role in designing semiconductors, which are used in everything from cars to smartphones and washing machines, the government’s newly formed department for science, innovation and technology (DSIT) said.

“Our new strategy focuses our efforts where our strengths lie, in areas like research and design, so that we can build our competitive advantage on the global stage,” Prime Minister Rishi Sunak said in a statement.

Britain will invest £200m in 2023-25, rising to £1bn over the next decade.

Sunak is in Japan for a meeting of leaders of the Group of Seven (G7) nations, where he agreed with Japan’s Prime Minister Fumio Kishida to launch a “semiconductor association” to cooperate on research and bolster the resilience of the supply chain. Britain has a similar agreement with South Korea.

The emphasis of Britain’s strategy was on design and research, rather than making semiconductors, although Britain said it would announce plans to support investment in the chip-making sector by the autumn.

The UK strategy comes after worldwide chip shortages during the COVID-19 pandemic disrupted a variety of industries and hit car productionalthough now they have began to ease.

The United States announced $52.7 billion in chip subsidies last year, while a European Union chip law proposes to generate around 43 billion euros ($47 billion) in investment. Others, including Japan, India and South Korea, have come up with their own semiconductor strategies in recent years.

Those moves, partly in response to chip shortages and partly to better compete with Chinese tech efforts, have sparked calls in Britain for the government to act faster.

A report by a panel of lawmakers said last year that Britain’s lack of an end-to-end semiconductor supply chain left it particularly exposed to any future disruption in chip supplies, such as if China invaded Taiwan, the biggest supplier. of semiconductors in the world. .

($1 = 0.7923 pounds)

($1 = 0.9084 euros)

Reporting by Alistair Smout and Sachin Ravikumar

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