A company behind plans to build a £68m semiconductor chip factory in the North East has called into question the Government new strategy for its sector.
Pragmatic Semiconductor aims to create more than 100 jobs when it opens production at its 175,000 sqft Meadowfield site later this year. The firm has previously called for the Government to back UK semiconductor manufacturers but now a much-awaited strategy has been published, Pragmatic's founder has called into question its effectiveness.
The National Semiconductor Strategy promises £1bn of investment over 10 years into what it says are UK's strengths in design, research and development, and compound semiconductors. But critics of the plan say it pales in comparison to spending by the US and EU, and does not go far enough to boost domestic production seen as vital to secure supply chains.
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Pragmatic's Scott White said he was pleased to see the Government recognise the potential of UK research and acknowledgement for his firm's own area of specialism in flexible chips, but urged more detail on spending commitments. He said: "There still are some question marks raised over the strategy when looking at the funding allocation. There needs to be further clarity around exactly what the £1bn will be applied to, as well as how and when it will be applied.
"When you look at the areas the UK is focused on there is a valid question to be asked over whether that’s enough money to make a difference – is it too much of a dilution to spread the amount over 10 years? That can only be answered with more detail. Ultimately, you could invest £100m annually into something that really moves the needle for the industry. You could equally waste £1bn in a year by focusing it on areas that won’t have an impact."
The Government has pledged £200m over the next two years in what it says will be efforts to improve industry access to infrastructure, power more research and development and facilitate greater international cooperation. As well as a new UK Semiconductor Advisory Panel, made up of industry, government and academia figures, the Prime Minister this week set out a semiconductor partnership with Japan while visiting the country as part of the G7 summit.
The UK’s Department for Science, Innovation and Technology (DSIT) will collaborate with Japan’s Ministry of Economy, Trade and Industry (METI) to deliver new research and development, create skills exchanges, and improving the resilience of the semiconductor supply chain for both countries. Next year, UK Research and Innovation will work with Japan's Science and Technology Agency on a joint investment of £2m into early stage semiconductor research.
The efforts come as the threat of conflict between China and Taiwan - where most of the world's chips are produced - is heightened. However, the UK's financial commitments are nowhere near the $52bn of subsidies offered in the US to semiconductor manufacturers, and the €43bn of investment promised by the EU before 2030.
Mr Sunak said: "Semiconductors underpin the devices we use every day and will be crucial to advancing the technologies of tomorrow. Our new strategy focuses our efforts on where our strengths lie, in areas like research and design, so we can build our competitive edge on the global stage.
"By increasing the capabilities and resilience of our world-leading semiconductor industry, we will grow our economy, create new jobs and stay at the forefront of new technological breakthroughs."
Lucy Powell, Labour’s shadow digital, culture, media and sport secretary, said the scale of ambition in the strategy would likely be “met with disappointment” after “years of delay”.
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