UK minister warns semiconductor industry cannot ‘recreate Taiwan in south Wales’
The UK chip sector cannot “recreate Taiwan in south Wales,” tech minister Paul Scully has said, amid concerns that the UK has not pledged enough investment to compete internationally.
Speaking to the Financial Times, Scully said that the UK must focus on advanced manufacturing and design instead of looking to out muscles rivals such as the US and China with billions of pounds of state subsidy and investment in chip-making factories.
“To leverage our position, it is about advanced packaging and design,” he told the FT, stating that the UK should be an “integral part” of the semiconductor supply chain as opposed to competing in manufacturing. “We are not going to recreate Taiwan in south Wales,” he said. “It’s just not going to happen.”
“The opportunity that we have if we get this right, [because of] the ramping-up of the need for semiconductors, is huge,” Scully added. “So we can really make the most of that, but we’re not going to do it through just a massive load of fabs in the UK.”
It comes amid a global race by major powers to lure the chip making industry to home turfs.
Semiconductors have risen up global governments key technological priorities after the pandemic prompted industrial shifts in supply and demand.
Geopolitical tension between China and Taiwan – who produce over 60 per cent of the global supply – have also bumped chipmaking up the political agenda.
Big funding packages have been announced, including $70bn (£55.2bn) by the US through its Chips and Science Act and major announcements from the EU, South Korea and Japan.
Germany recently signed a deal with US-based technology group Intel to provide one third of the cost of a €30bn (£25.9bn) project to build a chip manufacturing site in Magdeburg.
The UK’s own national strategy, announced in mid May, promises a much smaller £1bn investment and has been accused of a lack of ambition.
“Rather than the £1bn headline, the reality is £200m over the next three years – significantly less ambition than our competitors,” Lucy Powell, shadow secretary of state for digital, culture, media and sport, said following its announcement.