News Article

“Onshoring” Chip Production Is A Red Herring For UK

News

Imagination Technologies and Global Counsel have published a new research report providing a fresh perspective on how the UK can respond to ongoing challenges in the semiconductor sector. The report draws from a series of in-depth interviews with policymakers and industry leaders across the semiconductor space.

Semiconductors are found in everything from cars and smartphones, to medical devices and solar panels. As everyday technology has become more sophisticated, so too has the semiconductor industry. The component parts of a single smartphone microchip might pass through eight different countries before eventually reaching the end-user, resulting in a complex and interdependent value- chain.

Covid-induced supply-chain issues resulted in policymakers across the world rushing to develop new strategies to increase supply chain resilience and expand local manufacturing capabilities through subsidies and tax incentives, such as the so-called “CHIPS” Acts in the EU and US. The Ukraine crisis has intensified policymaker interest in shoring-up domestic resilience. The UK government is currently reviewing its strategic approach to the semiconductor industry.

The report argues that the UK should reject this “onshoring” approach for both strategic and economic reasons. The costs of full onshoring semiconductor production to the UK is simply not viable given the capital available and economies of scale required. Furthermore, this strategy also requires dependence on domestic production and would work against our existing comparative advantage.

Instead, the report states that the UK should double down on areas where it has a competitive advantage, particularly in a post-Brexit environment. The UK should instead have a microchip strategy with three core aspects: enhancing research & development, promoting and protecting intellectual property and championing diversification.

The UK is the clear leader in Europe in semiconductor design, where its unique science and technology ecosystem has helped foster over 110 design firms. Government institutions like the new ARIA (Advanced Research and Invention Agency) and British Business Bank could channel new private and public investment into the most cutting-edge areas of semiconductor R&D. Trade diplomacy must also play a vital role in the UK's approach, where the UK should work with trusted, like-minded partners who have common approaches to trade policy and IP protection.

Stephen Adams, Senior Director, Global Counsel, says, “Semiconductors are a hugely valuable and ubiquitous component in modern technologies. We need to think carefully about what the UK's place should be in the global value chain that underpins them. Playing to our strengths and prioritising strategic interdependence can ensure the UK remains a global leader.”

Simon Beresford-Wylie, CEO, Imagination Technologies, says, “As the UK government develops its widely anticipated in-depth review into the semiconductor sector, this report acts as a starting point for a wider debate about where the UK goes. The UK must adopt a holistic approach which takes bold measures to shape the future of design, manufacture and trade.”

Imagination is a UK-based company that creates silicon and software IP (intellectual property) designed to give its customers an edge in competitive global technology markets. Its GPU, CPU and AI technologies enable outstanding power, performance, and area (PPA), fast time-to-market and lower total cost of ownership. Products based on Imagination IP are used by billions of people across the globe in their smartphones, cars, homes, and workplaces.

See www.imaginationtech.com.


{inStory3}
×
Search the news archive

To close this popup you can press escape or click the close icon.
Logo
×
Logo
×
Register - Step 1

You may choose to subscribe to the Silicon Semiconductor Magazine, the Silicon Semiconductor Newsletter, or both. You may also request additional information if required, before submitting your application.


Please subscribe me to:

 

You chose the industry type of "Other"

Please enter the industry that you work in:
Please enter the industry that you work in:
 
X
X
Live Event