UK-US Opportunities in Semiconductor Geopolitics

UK-US Opportunities in Semiconductor Geopolitics

Insights from Industry Leaders on the Future of the UK Semiconductor Industry

On Tuesday 21 March, leading representatives from British industry joined Access Partnership’s Senior Policy Manager Michael Laughton for a webinar on the future of the UK’s semiconductor industry. 

The event, Pass the Chips: UK-US Opportunities in Semiconductor Geopolitics, brought together three highly respected speakers – Gerry Kindlon, Director of Government Affairs, Europe, at Seagate Technology; Stephen Pattinson, Vice President of Public Affairs, ARM; and Ricardo Masucci, Director of Security and Technology Policy at Intel – for a timely and thought-provoking discussion. 

With the UK’s long-awaited Semiconductor Strategy set to be published shortly, the conversation spanned the current state of the UK sector, growth opportunities, and structural barriers that need to be overcome. 

What is feasible in the UK?

All three speakers stressed the UK’s considerable industry potential, with the government well-positioned to heed the lessons of the COVID-19 pandemic and the war in Ukraine in terms of being overly dependent on outside markets. Given the sector’s complexities, there was also broad consensus regarding the necessity of collaboration with like-minded partners to build on and maximise regional and national capabilities. 

Through a targeted approach, the panellists expressed confidence that realising these goals would strengthen international partnerships, securing the supplies of critical resources, leadership, and talent that will drive the industry forward. Consequently, the UK can become increasingly influential in key sectors within the semiconductor landscape without extending its outreach to commitments that it doesn’t currently have the technological or fiscal capacity to support. 

One key prediction made during the course of the roundtable was that the UK would struggle to attract funding for its most ambitious projects. Instead, it was stated that the government should build on ‘tradeable competencies’ – existing areas of interest in which the UK can consolidate its position through scalable growth to become a specialised industry leader. 

Further to this discussion, Stephen Pattinson argued that the UK’s strategy should ensure that innovative applications do not overshadow the importance of securing supplies of ordinary chips, which have applications in sectors such as defence. The panel agreed that recent attempts by several governments to build resilience by reshoring their supply chains were unrealistic due to the industry simply being too specialised and capital-intensive. 

Shaping a successful strategy

In terms of building a successful strategy, Gerry Kindlon thought it best to categorise UK policy guidance according to four principles: creativity, diversity, connectivity, and engagement. Governments were also encouraged to build complementarities both across the UK and internationally to facilitate talent attraction across semiconductor-related sectors and skillsets, including academia. 

Building on this topic, education was another key component highlighted by each participant. Ricardo Masucci recommended developing curricula that build knowledge and skills from a younger age, helping to develop talent in a diverse and thriving ecosystem. Stephen Pattinson, meanwhile, recommended incentivising universities to work with companies to build key expertise and encourage multidisciplinary higher education that combines business with computer engineering. 

Conversely, Gerry Kindlon argued that investments in education should not overshadow the value of existing technical knowledge to support innovation, pointing to the first Industrial Revolution as an example of workers and technicians with practical knowledge innovating their sectoral practices from within. 

Challenges ahead

In terms of ongoing challenges, energy has replaced labour as the key cost concern for international competition. Gerry Kindlon emphasised the intensity of this shifting dynamic, describing how recent disruptions had increased energy prices at Seagate’s Northern Ireland factories by 100%, compared to only a 20% increase in the US. Stephen Pattinson stressed the importance of ensuring that new, alternate energy sources in the UK are cheap enough to maintain competitiveness. 

Specialised approaches to semiconductor strategy were recommended. Stephen Pattinson put forward the idea that growth depends on building an ecosystem comprising a collection of companies innovating within the field. By creating such a cluster of innovators, he argued that serious technological enhancements can subsequently be made. This process could then be replicated in other areas. 

Global relationships

As the conversation shifted back to the global picture, the panellists again pushed back against government attempts at protectionism and emphasised the importance of international cooperation. From a UK perspective, the EU, US, and Japan were cited as key partnerships that should be fostered to build supply chain resilience and expanded access. Ricardo Masucci recommended transitioning from a “just-in-time” to “just-in-case” supply chain to build resilience, preventing a reoccurrence of disruptions that occurred in light of the pandemic.   

The UK’s relationship with the EU received particular focus, with the speakers identifying the Horizon Europe project as a perfect example of how the UK government needs to hold government-to-government conversations that facilitate UK companies’ access to European research and capabilities. 

In their concluding remarks, the panellists presented the current dilemma as one of strengthening local ecosystems while concurrently maintaining global supply chains and levering knowledge. The industry’s reliance on the exchange of ideas, talent, and resources demands the cultivation of strong partnerships with like-minded countries to produce common solutions to complex challenges. 

If you’re interested in gaining valuable insights from industry leaders about the future of the UK’s semiconductor industry, fill out the form below to access a recording of our recent event, “Pass the Chips: UK-US Opportunities in Semiconductor Geopolitics”.

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