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British Chip Manufacturers Call for Urgent Investment

British Chip Manufacturers Call for Urgent Investment

The ‘Chipageddon’ event of chip manufacture supply falling far short of demand continues worldwide, but investment into the industry across some territories seems finally to be stabilizing a position. In the US, the White House has invested some $50bn with this continuing across a five-year period to help; with $29bn spent on boosting production and $11bn on research and development thus far. The European Union has announced plans for some $43bn of similar investment, but for the freshly departed United Kingdom, there seems to be no such intention.

Now, British firms within the microchip and semiconductor industries are calling for their own government intervention – or warning that they face relocation to territories able to intervene.

Pragmatic Semiconductor, which operates in the UK is considering moving elsewhere if state intervention is not made soon. Chief Exec Scott White has released a statement calling on the government for help, saying “[They] must act now to secure the future of the vital UK semiconductor industry. A few tens of millions of pounds isn’t enough to move the needle – it has to be hundreds of millions, or even more than £1bn, to make a substantive difference. It is not about unfair subsidies, it is about having a level playing field with other countries worldwide. Manufacturing in the UK only makes sense if the economies are justified compared to elsewhere”.

Chairman of the Royal Academy of Engineering (RAE)’s engineering policy center committee, Professor Nick Jennings, agrees. “Other countries are continuing to invest significantly in their own semiconductor industries, and the UK will fall behind without timely government action and a coherent strategy”, he says, also calling for an industry body to be set up; “Crucially it could speak for the sector, provide a coordinated voice that would allow the industry to present a united front”.

Indeed the industry as a whole across Britain appears to agree. A report published by the RAE in conjunction with the Institute of Physics (IOP) at the beginning of March 2023 found that “the UK’s position in the vital semiconductor race is threatened by skills shortages, high costs, and low public awareness”; with a call for more financial support across the sector in the country.

Of course, as a relatively small country (albeit it is one well-populated and considered at the forefront of various world technologies), it seems fair that the option of importing microchips and semiconductors is discussed. Industry experts, however, reject this: with the IOP suggesting this is not realistic and that “[The UK] needs a strong, homegrown semiconductor industry, critical to our economic security and physical security”. Currently, the UK’s semiconductor sector is valued at $13bn, but this is just over 2% of the global industry which sits at $580bn. With the country only producing 0.5% of the world’s semiconductors across 40 or so British firms, there is estimated to be a total workforce of fewer than 11,500 people.

Meanwhile, it seems as though help is on the horizon – but there remains no confirmed date for intervention just yet. A UK government spokesperson has been quoted as saying to the BBC “Our forthcoming semiconductor strategy will set out how the government will improve the sector’s access to the skills, facilities and tools it needs to grow. The strategy will be published in due course”.

If you’re concerned about being unable to source the parts you need during the ongoing shortage, don’t fret! Procurri is the world’s number one independent distributor of network, storage, and server parts with quick shipping and a global inventory of new, end-of-life, legacy, and refurbished stock. Get in touch to find what you need.

Mat Jordan joined Procurri in 2014 as Sales Director of Procurri UK Limited and has been appointed as our Head of EMEA since 2016. He oversees our Group’s operations in EMEA.

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