MPs criticise government over semiconductor strategy delay

UK ministers were criticised on Friday for continuing to delay a long-awaited strategy to support the semiconductor industry by a committee of MPs.

The government had intended to publish the plan to develop Britain’s chip sector by the autumn 2022, according to a report by the business, energy and industrial strategy committee.

However, its release has continued to be pushed back, causing widespread concern in the tech industry about the UK losing ground to rival countries in fostering growth in an important sector.

The delays have also been a factor in the deliberations at Japan’s SoftBank over whether to list Cambridge-based chip firm Arm in the UK, as well as the US, according to people close to the process.

On Friday, the MPs on the committee said delaying the semiconductor strategy further was an “act of national self-harm”.

A blueprint to ensure security of chip supply chains must be published urgently, the committee added, or the development of Britain’s chip manufacturing sector would be put at risk.

In a report in November, the committee’s recommendations included that the UK undertake better co-operation with allies to safeguard supply and to secure inward investment. But the MPs cast doubt on whether government support for the industry was “sufficient to have any meaningful effect”.

Committee chair and Labour MP Darren Jones said the government was hiding “behind its failure to publish a semiconductor strategy for not responding to our practical recommendations fully”.

The blueprint is expected to set out the results of a review of the sector to improve the resilience and security of UK supply chains and drive innovation.

The committee pointed out that the US Chips Act committed $52bn to subsidise US semiconductors, while the EU has set aside €43bn and Japan has its own multibillion-dollar plans.

Jones added: “Countries across the globe have grasped the importance of securing semiconductor supply chains for their futures, why haven’t we? While others race ahead, ploughing billions into setting up fabs or industry support, we’re not even at the starting line.”

The report by MPs follows a letter sent to the prime minister in January from tech industry executives calling for a co-ordinated and comprehensive semiconductor strategy “as a matter of urgency”.

The signatories included Hermann Hauser, director of Amadeus Capital Partners and one of the co-founders of Acorn Computers, where he helped spin out Arm.

The letter warned that Britain’s status as a leading tech ecosystem is at risk given how swiftly the US, the EU and China are acting to invest in silicon research and construction of chip plants.

It said: “The technology and manufacturing sectors have been waiting more than two years for the promised strategy, and confidence in the government’s ability to address this industry’s vital importance is steadily declining with each month of inaction.”

DCMS said: “We are committed to supporting the UK’s vitally important semiconductor industry. Our strategy will address the recommendations identified by the committee, including opportunities to grow the sector further and make sure we have a resilient supply chain.

“The strategy will be published as soon as possible.”