Mixed reception for UK semiconductor strategy

The UK government has announced a new £1bn semiconductor strategy to build on industry strengths and safeguard supply chains. 

The government says the surge in demand for chips and recent shortages has shown how reliant the UK is on chips, and that its strategy will mitigate the impact of supply shortages and to protect critical industries such as healthcare, infrastructure and defence.

Alex Saric, a Smart Procurement Expert with procurement platform Ivalua said of the move: “Safeguarding the UK against disruption from semiconductor shortages is critical to continued economic growth and security. 

“Planning supply chains in collaboration with reliable trading partners is important to mitigating geopolitical risk, but it is insufficient. 

“Disruptions can come from many other factors, such as environmental disasters, health emergencies or labour disputes. UK organisations must build supply chain strategies that consider the broad set of risk categories, then minimise the impact of disruptions through proactive monitoring of and collaboration with suppliers. 

”Working with suppliers to solve shortages, rather than trying to drive down costs and demand to be at the front of the queue, will help position UK businesses as partners of choice during times of shortage.

“There’s also a role for the circular economy to play. Each year, millions of devices and equipment containing chips are scrapped or thrown away. 

“In the UK, there’s an average of 23.9kg of eWaste per person, with 38% of this waste not being recycled – these chips could help to boost supply. “Not only would this help ease the burden on supply chain during times of shortages, it will also have a positive impact on the economy, and encourage regenerative design to reduce reliance on finite resources.”

Meanwhile, Scott White, Founder of Pragmatic Semiconductor –  one of the largest semiconductor manufacturers in the UK – said: “I welcome the fact that the government has recognised the potential of more sustainable semiconductors, by committing to build on our existing research base. I was also pleased to see the strategy references our UK manufacturing capabilities to produce flexible semiconductor devices, an area where the UK can truly lead the world. 

“However, 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 £1 billion 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 £100 million annually into something that really moves the needle for the industry. You could equally waste £1 billion in a year by focusing it on areas that won’t have an impact.”