A House of Commons committee report concludes that the U.K. government needs to implement a semiconductor strategy now, but the industry’s response suggests the committee hasn’t grasped the U.K.’s strength in semiconductor design.
FREMONT, CA: A select committee of the British House of Commons criticised the government for lacking an official semiconductor strategy, and that one is created as quickly as feasible. The semiconductor industry offered suggestions for what should be in that strategy. However, the committee may not have completely appreciated the importance of the U.K.'s contribution to semiconductor design because it concentrated its suggestions on manufacturing.
The report included contributions from many members of the UK ecosystem, but the compound semiconductor group ultimately had the biggest impact. In the wake of a U.K. government review of the deal and a final order to withhold 86 per cent of the company from the new owner.
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The committee report recognises that the U.K.'s contribution to IP and system design is greater than its status as a modest player in the global semiconductor value chain in manufacturing. The U.K. has to strengthen its relations with the U.S. and Europe despite Brexit), and it should concentrate on supporting the design chain for leading-edge node chips such as intellectual property and design, matching UK design capability to UK manufacturing capacity and developing silicon semiconductor manufacturing methods. It should also focus on enhancing current capabilities in advanced and compound semiconductors to fulfil demand in emerging areas, and assisting in building new factories, including the possibility of an open-access factory in the South Wales cluster.
In any event, design will become increasingly important in the future, and the technologies that support design have only undergone gradual advancements for decades. It has been years since a design paradigm change occurred, and open source will finally bring it in. A large wave is approaching; they could and ought to be surfing it.
Qualcomm (NASDAQ: QCOM) joined others urging for greater support of the local design industry in its written testimony to the U.K. government select committee. However, semiconductor design needs considerable investment in long-term R&D without any assurance of a return, making it a very capital-intensive field.
UK officials should consider the following strategies to advance the UK semiconductor industry:
Reward riskier R&D by encouraging investment in it: This includes, but is not limited to, investigating additional tax breaks, including more R&D tax credits and strategies for fostering cooperative research within the semiconductor sector.
Support innovation: Considering how they can contribute to the strengthening of intellectual property rights (IPRs), which are essential to a thriving innovation ecosystem and include patents, trade secret protections, and standards protections.
In its comments to the committee, Qualcomm urged the development of a talent pipeline, stating, While we welcome the U.K. Government's plans to make it easier to bring in talent from abroad, the U.K. needs to also look at ways to encourage more homegrown talent if it is to achieve its ambition of becoming a science and technology superpower. To create a pipeline of diverse inventors, policymakers should implement national initiatives to boost the number of people, including women and other underrepresented minorities, who graduate in STEM areas.
In its written response to the government committee, NXP Semiconductors also emphasised the talent issue, stating that skill shortages were a worry. It urged greater cooperation and pointed out that the issues will be made more difficult by the U.K.'s exclusion from European R&D programmes due to Brexit.
The U.K. country manager of the company makes the following statement in the press release: Collaborative R & D calls work, especially for systems projects, more than semiconductor production. But such efforts will be severely constrained if only U.K.-based businesses are allowed to participate.
Real consequences will result if post-Brexit constraints prevent participating in European R&D programmes. The U.K. is a modest player in the semiconductor industry; to move forward, collaboration is necessary, but it must extend beyond the borders of the U.K..
The United Kingdom is not typically considered a global chip industry powerhouse, but it has proven and attained global dominance in several key areas. This includes chip design IP from Arm and Imagination Technologies and advanced transistor modelling methods from GSS, a Glasgow University spinout recently acquired by Synopsys, the world's top provider of chip design automation. Despite its failure as a chip company, Inmos created world-class intellectual property at the core of many signal-processing applications.
Compound semiconductors are an emerging new chip area crucial for power, energy savings, and communications applications. Rockley's ground-breaking work in photonics, and graphene, an invention from Manchester University now being developed for the chip industry in Cambridge, are all areas to which the U.K. could not only contribute but also become a world leader in tomorrow's regional or global semiconductor supply chains.
