Major UK semiconductor manufacturer mulls operations shift to US citing concerns over support

Mon 7 Aug 2023
Posted by: Phillip Adnett
Trade News

Semiconductor being handled by gloved scientists

A major UK semiconductor producer is threatening to shift its operations base to the US, warning that the government’s current support for the high-tech microchip industry is lacking.

The Telegraph reports that Pragmatic Semiconductor is aiming to raise £100m to fund an expansion into the US.

Founder and CEO Scott White said:

“We can put our manufacturing capacity anywhere, and our desire as a British company is to do that in the UK.

“But it is subject, to a certain degree, to having the right initiatives coming out of the [government’s semiconductor] strategy that give us the support we need to do that and scale effectively within the UK.”

‘Obvious’ choice

White, whose company currently receives financial backing from UK taxpayers, described the choice as “obvious” because of the support given by the US CHIPS Act.

The US legislation has resulted in billions of dollars in funding being made available to boost American technological manufacturing, including semiconductor production.

Policy

The UK government launched its own National Semiconductor Strategy in May to mixed reviews from industry figures.

The policy looked to strengthen the UK’s perceived advantages in several areas – including compound semiconductors and research and development – but several critics noted that the £1bn financial package was relatively small compared to EU, US and Asian equivalents.

City AM notes that the US is investing £9.2bn in its chip industry. Last month the German government said it will invest £17.3bn in semiconductors.

Tech meeting

The news of Pragmatic’s shift to the US comes in spite of recent outreach by the Department for Science, Technology and Innovation to the industry.

Last week (3 August), technology minister Paul Scully hosted the first Semiconductor Advisory Panel at Imperial College London.

The meeting included Pragmatic’s White, as well as other senior leaders from organisations such as the University of Sheffield and manufacturers such as Arm and Americo Lemos.

Scully said: "Properly engaging and listening to the experts at the heart of researching, designing and producing semiconductors is essential if we're serious about growing our domestic sector, protecting our national security, and unleashing rapid innovation across the British economy."

The ten person panel will meet once every two months to provide advice and feedback to the government on its strategy.

Incubator

Details of the UK’s first semiconductor design incubator were also announced by the government last week.

The policy aims to give early-stage UK semiconductor companies support to bring new products to the market.

Applications for companies wishing to join the 9-month incubator process (starting in the first week of October) can be made now on Silicon Catalyst UK’s website.