No half measures for UK investment in Semiconductor-based technologies

Semiconductor-based technologies have become omnipresent in our society, and their use is only expected to increase. Because of this, the UK has announced a plethora of grants, investments, and subsidies for businesses involved in the development and manufacture of semiconductors.

 

On 20 May 2024 the UK Government announced a new independent UK Semiconductor Institute which will for the first time bring together government, universities and the private sector to support key components of the government’s Semiconductor Strategy to grow the sector, which is backed by £1 billion. Independent from Government, the Institute will promote the voice of industry and will be a single point of contact to promote the sector to investors and attract foreign investment in British research expertise.

 

The UK’s current prioritisation of its semiconductor industry was unveiled a year ago, in May 2023. This announcement officially published the UK’s National Semiconductor Strategy, which sets out how up to £1 billion of government investment is intended for use over the next decade for boosting “the UK’s strengths and skills in design, R&D and compound semiconductors, while helping to grow domestic chip firms across the UK”. £200 million of this pot is expected to be spent between 2023 and 2025.

 

The National Semiconductor Strategy also announced:

• the establishment of a new “UK Semiconductor Advisory Panel” for speaking on behalf of the semiconductor sector; and
• the introduction of a specialist incubator pilot program for providing industry with access to technical resources, coaching, and networking.

 

Following on from this, February 2024 saw the announcement of a UK investment of £26.8 million from the Engineering and Physical Sciences Research Council and Innovate UK to support two new Innovation and Knowledge Centres for semiconductors.

 

The new Innovation and Knowledge Centres will be based at the universities of Bristol and Southampton. They are expected to leverage research capability to commercialise semiconductor technologies, with a focus on high voltage electronic devices found in power generation and distribution (at Bristol) and silicon photonics technologies (at Southampton). More information about expected research partners and projects at the Innovation and Knowledge Centres is online.

 

Southampton and Bristol are merely two of the areas identified by research for the Department for Science, Innovation, & Technology as containing clusters of companies that work in the semiconductor sector. Other large cities in regions comprising clusters of semiconductor-based companies include: Glasgow, Edinburgh, Newcastle, Middlesborough, Leeds, Manchester, Sheffield, Stoke-on-Trent, Leicester, Birmingham, Cambridge, Stevenage, Swindon, Cardiff, Reading, Woking, Bournemouth, Portsmouth and Brighton. It is hoped that these other regions will also see an uptick in investment and growth as a result of investments resulting from the National Semiconductor Strategy.

 

Two further funding announcements for the semiconductor industry were made in March 2024. These are:

 

• £6 million investment through Innovate UK for powering up chips used in the green energy industry, with £14 million being targeted particularly at semiconductor used in converting and controlling power in energy intensive machines, including electric vehicles and manufacturing equipment; and
• Up to £35 million boost for the semiconductor sector by the UK joining the EU’s “Chips Joint Undertaking”, which provides the UK’s semiconductor sector with access to a 1.3 billion Euro fund from Horizon Europe for supporting research into semiconductor technologies up to 2027.

 

According to the second announcement “Tens of thousands of UK companies are now eligible for Horizon Europe grants, which are worth £450,000 to a business on average. UK firms already benefitting from Horizon funding include Nova Innovation, whose consortium won over £17 million to develop tidal energy in Orkney, and South Yorkshire tech firm The Floow who are part of a project awarded just under £3 million, looking into road safety.”

 

In addition to the above-mentioned grants and investments, funding may also be provided to semiconductor companies via other sources, such as the government-backed UK Infrastructure Bank and British Patient Capital, a subsidiary of British Business Bank, such as British Patient Capital and others (see here). [https://www.british-business-bank.co.uk/about-us/who-we-are/corporate-information/]

 

Overall, there’s not a better time to invest in semiconductor research and development in the UK, with a range of projects expected to support and grow the clusters of semiconductor-technology-based companies based across the UK.

 

This briefing is for general information purposes only and should not be used as a substitute for legal advice relating to your particular circumstances. We can discuss specific issues and facts on an individual basis. Please note that the law may have changed since the day this was first published in May 2024.