Four steps to building a semiconductor industry fit for the future
The UK Government’s much anticipated semiconductor strategy provides an opportunity to seize a leading role for the UK in a sector that underpins virtually every modern industry. Scott White, CEO of flexible semiconductor manufacturer Pragmatic, outlines the four steps to doing so.
The semiconductor industry has faced a range of unprecedented global challenges, which have disrupted industries, delayed manufacturing and impacted economic growth. Governments around the world are reacting, moving to secure the long-term future of their semiconductor industries, and the supply chains, skills, R&D and manufacturing that underpin them.
Against this backdrop, the UK has a unique opportunity to cement a world leading role in a specific area of semiconductors that should be at the very heart of the upcoming Semiconductor Strategy - flexible semiconductors.
At Pragmatic we are proud that we are the only company in the world manufacturing flexible chips, from our fabrication plants (‘fabs’) in the North East of England. This provides the UK with an opportunity to cement its leadership in this crucial area, with significant economic benefits for the whole country.
The UK can’t compete with other parts of the world in silicon semiconductors, but has a unique position in flexible chips, which offer a dynamic and far more economical alternative. The UK must seize this opportunity and it begins with the support that can be offered in the Semiconductor Strategy.
There are four clear steps that the UK Government can and should take as part of the Semiconductor Strategy that would provide the best possible foundation of future success and address the complex challenges and issues facing the semiconductor industry.
1. Creating a level playing field with other markets
Firstly, the Government needs to ensure that the UK becomes as attractive a destination for investment and manufacturing as other countries, including the United States, Germany and the wider European Union, and counters the threat from China and elsewhere in the Far East, including relatively new entrants into semiconductor manufacturing such as India.
Already these countries provide significant support to semiconductor manufacturers for capital investment in machinery and manufacturing, and this has recently been enhanced via legislation such as the CHIPS Act in the US. A similar package of ambitious support in the UK would encourage investment in manufacturing capabilities that underpin the long-term success of the sector.
An advantage of flexible semiconductors is that relatively low levels of support (tens of millions of pounds) would achieve significant benefits for the UK’s ability to compete on a global level - in contrast to silicon chip manufacturing requiring billions of pounds.
2. Creating homegrown revenue opportunities for UK based manufacturers
Secondly, the Government should create home grown revenue opportunities for flexible semiconductors, for example by using public sector procurement to grow the sector and using policy to drive private sector adoption of the technology.
Procurement measures could include annual public sector procurement targets, commitments to ‘buy British’ semiconductors, and encouraging public bodies, like NHS trusts, to explore uses of the technology. Legislation like that implemented by the EU on single-use plastics could be put in place to encourage private sector investment in new applications for flexible chips.
Aside from supporting a world leading part of the semiconductor industry, support for these sorts of opportunities would create wider benefits across a range of sectors.
From healthcare applications that will revolutionise the way we treat complex conditions, to sustainability solutions that will help deliver the UK’s net zero ambitions, to facilitating frictionless borders, flexible chips hold the key to unlocking advances that will help tackle some of society’s greatest challenges.
3. Securing the UK’s semiconductor supply chains
Thirdly, the Government should look to establish dedicated UK ‘secure’ fabrication plants, to create a greater degree of supply chain security for the UK.
At Pragmatic we have developed an innovative distributed manufacturing model – ‘Fab-as-a-Service’ - which enables agile, on-site, ‘just-in-time’ chip production that ensures continuity and security of supply at a local and national level. The compact design of these ‘fabs’ means that they can even be located at a customer site.
This model would provide the Government with an affordable way to create UK Secure Semiconductor Fabrication Plants, to meet national security needs for the UK and, where appropriate, our allies. These fabs could also be used to deliver components for key government requirements such as secure documents, digitalised healthcare and to enable frictionless borders.
4. Tackling the skills and talent gap
Finally, the Government must take concrete action to address the skills and talent gap around the semiconductor sector. This includes encouraging a greater focus on electrical engineering and vocational qualifications, through increasing the profile of T-Levels, and university partnerships. Importantly, however, this must be in addition to the actions mentioned above, not as an alternative – investment in skills will only generate value for the country if we have an exciting and thriving semiconductor sector for people to work in.
The Government should also reconsider how it measures the value of jobs created within the semiconductors industry, to better reflect the value-add of these roles. In the US, for example, the semiconductor industry’s jobs multiplier is 6.7, meaning for each worker directly employed, an additional 5.7 jobs are supported in the wider economy.
An opportunity not to be missed
The UK Government’s work to develop a Semiconductor Strategy shows its commitment to the UK competing in the global race for semiconductor expertise. The four steps outlined provide a blueprint for how this country can seize the unique opportunity presented by flexible semiconductors. It is an opportunity we can ill afford to miss.
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