...so why has the industry been sabotaged by years of neglect?

EFFORTS to set up a semiconductor strategy in the UK have been sabotaged by years of neglect.

The industry has repeatedly called on Ministers to roll out a comprehensive plan that provides detail on areas such as funding and skills training.

The Government was also slammed for allowing the sale of Britain’s biggest semiconductor maker, Newport Wafer Fab, to a Chinese buyer in 2021 without any scrutiny. This was later overturned following outcry from MPs and security experts.

But the absence of clear assistance for the sector has led to a dearth of enthusiastic investors and caused innovative companies to look overseas to set up their businesses and attract funding.

The lack of confidence in the industry was laid bare earlier this month when Cambridge-based chip designer ARM Holdings, the jewel in the UK’s semiconductor sector, snubbed a stock market listing in London in favour of New York. It was a major blow to the City after officials at the Treasury and London Stock Exchange had spent months wooing ARM’s owner, Japan’s SoftBank.

The Government has previously pledged to publish a semiconductor strategy, but nothing has been forthcoming. A report from the Business, Energy and Industrial Strategy Committee stressed it had been ‘already two years in preparation’ and said it ‘needs to be published urgently’, with MPs adding the delay was ‘difficult to understand’.

The lack of a domestic industry has left UK manufacturers, including some of Britain’s biggest car makers, exposed to global shortages after the supply of chips was disrupted during the pandemic. Semiconductors are essential to all modern electronic systems. Even before Covid there was a shortage of factories worldwide to meet growing demand for chips in everything from ‘smart’ fridges to mobile phones.

But there are also shortages of key parts such as silicon components and rare earth metals. China has a stranglehold on the supply of much of these materials.

The Government said earlier this year that it was in ‘talks with likeminded nations’ to help boost the UK’s semiconductor capabilities, but a full plan has yet to be rolled out. Whitehall has been urged to work more closely with allies in the EU and US to safeguard the future supply of semiconductors.

An industry source: ‘I don’t think the UK can compete financially with the US.’

He added that it would be ‘impossible’ for Britain to match the manufacturing capabilities of the US and China.