UK launches microchip revolution amid fears of a China-Taiwan war

MINISTERS are planning a British electronics revolution to protect the country if China invades Taiwan and cripples the global microchip market.

Chancellor Jeremy Hunt and Science Secretary Michelle Donelan are drawing up a ‘semiconductor strategy’ as part of wider moves to ease the UK’s reliance on the Asian market for vital electronic components.

Taiwan – which China regards as a breakaway ‘province’ that will eventually be placed under Beijing’s control, by force if necessary – produces an astonishing 90 per cent of the world’s most advanced microchips used in smartphones, computers, cars and military hardware.

Chinese President Xi Jinping has said that ‘reunification’ with the island, which sits only 100 miles from the coast of South-East China, ‘must be fulfilled’, and has mounted a series of shows of military force in the Taiwan Strait.

American intelligence say he has instructed his military to be ready to invade by 2027 in an assault that would involve the biggest amphibious invasion force since the Allied D-Day landings. But the US fears military force could be deployed as early as 2025, after the next American Presidential election.

Allowing Taiwan’s electronics industry to fall into Chinese hands would be a huge strategic blow to the West.

The UK’s dependence on foreign microchips became clear when the Covid crisis caused an acute disruption to supply chains, which has prompted a scramble within Whitehall to boost domestic production.

A senior Government source said: ‘We are working on a so-called “coiled spring” model, which will focus on our strengths in semiconductor design and invest in research and development, while forging new international agreements with Western allies such as the US, Japan and the Netherlands.

‘The ultimate aim is to create a semiconductor manufacturing industry in the UK.’

The move is likely to trigger a fight for the most talented experts in the field with the US, which has also pledged to boost its microchip industry.

President Joe Biden last year allocated $52billion (£43billion) to promote the production of microchips and help ‘win the economic competition in the 21st Century’. US commerce secretary Gina Raimondo said: ‘Our dependence on Taiwan for chips is untenable and unsafe.’

Taiwan makes 65 per cent of the world’s semiconductors and almost 90 per cent of the advanced chips, for customers including Apple.

China has also been trying to boost its semiconductor manufacturing capacity, recently pledging £123 billion to expand the industry.

Britain’s high-tech businesses are mainly clustered in the so-called Silicon Fen around Cambridge.

No date has yet been set for the new strategy to be announced, as funding levels are still being negotiated in the Treasury.