Tech Week Day Four: Chips will be the battleground on which the contest for tech innovation is fought

The penultimate day of London Tech Week is a timely occasion to discuss an industry not just under the spotlight in the tech sector, but the business agenda more broadly. 

Semiconductors, or ‘chips’, are the building blocks of electronic devices driving our rapid technological advancement and economic development. In his opening speech this week, the prime minister listed semiconductors as one of four sectors which are shifting the “tectonic plates of technology” alongside AI, quantum and synthetic biology. 

Despite their huge significance to the tech sector and the global economy, just a few years ago conversations about semiconductors were limited to only the most technically literate. Now chips have a significant place in the government and businesses’ agendas when it comes to national security, innovation and economic growth. 

The disruption caused by the pandemic led to a shortage that directly impacted business and consumers. Some carmakers halted production in 2021, and consumer products like Playstations and Xboxes disappeared from store shelves. 

In addition, increasing geopolitical concerns about an overreliance on semiconductor production in Taiwan, which produces 60 per cent of the world’s advanced chips, means semiconductors have become not just a key economic issue, but also a matter of national security.

The UK was an important player in early semiconductor development, but its strength in this critical industry has diminished compared to many other nations. Now, the question is how Britain can adjust to its relative capabilities and find a role that builds on its strengths while protecting our world leading tech sector.

The government is starting to do its bit. In May, it published the eagerly awaited and highly scrutinised National Semiconductor Strategy. The UK is in the midst of an economic squeeze, but critics were right to point out that the £1bn pledged represented the equivalent cost of just one new semiconductor plant.

However, the strategy does identify the need to build on the areas where the UK has genuine competitive advantages, such as in R&D, IP and design. It also recognises the importance of mitigating the risk of supply chain disruption, while the newly announced partnership with Japan is a big step in the right direction. As ever, its success will come down to execution. 

The tech industry cannot expect all the weight of protecting the UK’s interests to fall on the government, however.  

In January, myself and a group of industry leaders came together to call on the government to deliver the much delayed semiconductor strategy. We are now formalising this group into a “Chips Coalition” that will regularly meet to discuss the challenges and opportunities to work through potential solutions and communicate more broadly about this strategic sector.

This coalition will involve Global Tech Advocates aligning with other industry groups, including techUK, TechWorks, the Compound Semiconductor Centre, representatives from multinational manufacturing and design firms, as well as university partners and cluster representatives. 

The array of innovation on display at London Tech Week and the record number of international delegations underscores the UK’s status as a world leading hub for tech. But it is chips which underpin many of the technologies discussed this week, so maintaining this status will require the UK to establish a clear role internationally on this critical technology. 

With unique research and development capabilities, the opportunity is there. But it will require significant investment, a long-term commitment, a broad coalition of leaders and a proactive approach to striking up new global partnerships. It’s no small feat.