Creating a UK semiconductor ‘super cluster’ to drive growth and exports for the long term
Martin McHugh, CEO at CSA Catapult explains the steps needed to transform the UK’s semiconductor industry and drive economic growth for the long term
The UK semiconductor industry is at a critical stage in its evolution. As other countries invest heavily, there is a significant risk of the UK being left behind.
The UK cannot compete financially with these countries. We must capitalise on our strengths in chip design, R&D, IP and compound semiconductors. Semiconductors are essential to delivering the industrial strategy. They underpin several key industries, including automotive, defence, aerospace, health, telecoms and manufacturing.
CSA Catapult, as the UK’s authority on compound semiconductor applications and commercialisation, has published eight recommendations to support the industrial strategy and deliver growth.
Make semiconductors a national priority
Firstly, we recommend that semiconductors are recognised as a subsector of the industrial strategy.
Semiconductors underpin our economy, national security and everyday technology. They are being used to build green technologies and help tackle climate change. The industry must be given the attention and investment it deserves.
Strengthen and co-ordinate activity
The UK has over 200 dedicated semiconductor companies who generate £9.6bn in revenues and employ 15,000 people.
Clusters of expertise are in South Wales, the South West, Cambridge, the North East, Northern Ireland, and Scotland. However, the industry lacks a single, independent, unified voice to bring these clusters together.
We’re calling for the creation of a National Semiconductor Institute to strengthen, lead and co-ordinate targeted activity across the UK. The Institute will grow existing semiconductor clusters in the UK and unleash the full potential of our cities and regions.
Investing in infrastructure to build a UK semiconductor super cluster
To grow our clusters, we recommend a £305m Semiconductor Challenge Fund to provide them with critical infrastructure.
This includes a £150m investment in regional projects such as a UK Centre of Excellence for quantum photonic integrated circuits (PICs) and a world-first centre for AI-powered electronics, photonics, quantum and design automation (AI.EPQDA).
We also recommend investment in compound semiconductor manufacturing and infrastructure, specifically open access fabrication plants (fabs).
Fabs specialising in silicon carbide (SiC), gallium nitride (GaN) and gallium arsenide (GaAs) will remove barriers for start-ups and SMEs and allow them to grow quickly and efficiently.
Creating a talent pipeline
The UK’s semiconductor sector can only grow if we have the right people with the right skills driving it forward.
The role of a National Semiconductor Institute will be to coordinate policy developments in this space.
We also recommend investment in long-terms skills plans to create programmes and pathways that attract a larger, more diverse talent pool into the industry.
Removing barriers
We must also provide opportunities for the semiconductor sector to support national interests, such as prioritising UK companies for defence and digital infrastructure contracts.
We must also remove barriers by increasing access to funding, improving regulation and strengthening IP.
Progress is being made with the National Wealth Fund and unlocking UK pension funds to increase access to public and private funds.
The UK semiconductor industry has enormous potential and is estimated to be worth between £13bn and £17bn by 2030.
Our recommendations will build on existing strengths, support regional clusters and drive growth in this critical sector across the UK, positioning us as a global leader in semiconductor technologies.
PoliticsHome Newsletters
Get the inside track on what MPs and Peers are talking about. Sign up to The House's morning email for the latest insight and reaction from Parliamentarians, policy-makers and organisations.
