UK chips strategy must lure investment, says Dell executive
The UK’s semiconductor strategy must make the country a more attractive destination for investment, a Dell executive has told City PM
“We would like a business friendly, technology friendly environment, where it’s easier for us to invest more and its easy for us to see opportunities for us to make a positive difference,” Adrian McDonald, president for Europe, the Middle East and Africa (EMEA), said yesterday.
The microchips sector has undergone a “great deal of challenges” in recent years, as demand rises rapidly.
“We use fundamentally more chips. A car, for example, will have many more intelligent devices than it would’ve done five years ago,” McDonald explained.
During the height of pandemic measures across the globe, microchips were in increasingly short supply, which pushed automotive firms to ultimately downgrade their production forecasts.
“The China- Covid policy has extended those issues in recent months,” McDonald said, adding that it takes time to build that extra capacity.
Chipmaking competitor Intel announced earlier this year that it is looking to spend $20bn (£17.3bn) on two chip factories in the US. A typical wafer ‘fab’ often costs tens of billions, and around three to five years to become fully operational.
“Through the roof” demand, paired with Covid-19 restrictions have weighed heavily on the sector for some time – which has prompted government’s, including the UK, US and European Union, to up their game on security of supply.
“The world has been moving on ‘just in time’. But now the world is moving to a ‘just in case’ [outlook],” McDonald explained.
With tensions escalating between China and Taiwan, the world’s largest chip manufacturer, “it’s really about security of supply and security of access”, which is part of the reason the US has sought to block exports to China and Russia from chip companies dipping into its recently unveiled $39bn (£33.7bn) subsidies pot.
Samsung Electronics’ boss on Wednesday warned that the global semiconductor industry may take a turn for the worse later this year, after steadily rising demand.
However, McDonald assured that “in the medium-term, we’ll be just fine”.
“We live in the digital age. It’s moving at pace, it’s not going to slow down, its going to accelerate – even with the global economy challenged,” he continued, forecasting that the global spend on electronics will return to normal as early as next year.