Billions in US subsidies risk luring British semiconductor firms across the pond
The $52bn semiconductor subsidy package president Joe Biden is pushing through Congress is a “huge risk” to the UK’s chip making industry.
While Britain lacks a clear strategy on computer chips and an advisory board, unlike global competitors the US, Taiwan and Germany, billions in subsidies could lure UK-based businesses across the pond.
Asked about the likelihood of UK firms going to the US, CEO of British chipmaker Paragraf, Simon Thomas told City A.M.: “It’s a very big risk. It’s a huge risk.
“That $52bn is probably not the end, it’s probably the beginning.”
While the package is yet to be approved, Biden has urged that the backing is critical for the US to “stay in the game” as China and Germany pump investment into their homegrown chip makers.
It would take hundreds of billions in capital on average to build a business to the size of TSMC in Taiwan, one of the world’s biggest semiconductor producers, Thomas noted.
Thomas explained that it is “not possible” for the UK to match that scale of funding, but that “if investors know we’re supported by government we can attract that [capital] from other sources.”
The lack of an advisory board and government figure spearheading the industry is among the UK’s largest pitfall in making itself a leader in the semiconductor sector.
“We don’t really have industrially focussed leaders [in the UK]…That’s where we have a key missing point – having key commercial and industrial points to government is something the US is very good at doing,” Thomas continued.
CEO of fellow UK-based semiconductor firm IQE, Americo Lemos, called the US’ investment a “statement of intent” as governments across the world realise they “must take meaningful steps to secure their technology supply chains.”
“Given the proper support from government we could accelerate the creation of a more complete ecosystem for these semiconductors to serve the global industry,” Lemos told City PM “We hope that the actions of governments like the US will serve as a catalyst for decision-makers here in the UK.”
The government is expected to publish its strategy into the UK’s semiconductor industry this autumn.