The UK government has pledged to provide funding worth £1 billion (equivalent to $1.2 billion) over the next decade to build local capacity in the chip industry and to support research, development and intellectual property rights related to the semiconductor industry, within the framework of the new strategy it has adopted to strengthen its capabilities in the chip industry and to make of the country one of the most innovative economies in the world.
Great Britain preceded the leadership of the sector in Europe
Britain used to lead European semiconductor innovations, but successive governments overlooked the importance of this vital component, leading the country’s private sector to lose ownership. of the most important companies in the semiconductor industry such as Plessey, Imagination Technologies and Cambridge Silicon Radio and ARM Holdings, as the ownership of these companies was transferred to Japanese, American and Chinese entities, which placed the British semiconductor industry in a weak position.
Offers for foreigners worth $42 billion
From 2010 to 2020, the value of deals resulting from the sale of UK semiconductor companies to overseas buyers was around $42 billion, according to data compiled by Bloomberg, and the decision that most affected the British semiconductor industry has been selling ARM. Holdings, to Japanese group SoftBank in 2016 worth $33.3 billion, which observers considered London was selling Britain’s crown jewels to an outside investor, especially as ARM technologies end up in 90 % of mobile devices worldwide.
Sunak government seeks to promote digital sovereignty
The new strategy recently approved by the government of Rishi Sunak aims to strengthen British digital sovereignty, by supporting certain gatherings of excellence and innovation in the semiconductor industry, which still exist in the country, but the amount allocated by Britain to develop the chip industry, which exceeds 1.2 billion dollars. It is considered small compared to the amounts allocated by America, Europe, China and South Korea for to develop this industry, which raised the question of whether this amount was sufficient to compete with the rest of the competitors.
An amount adapted to the size of the sector
Engineer Rabih Saadeh, an expert in digital transformation, said in an interview with “Sky News Arabia Economy” that from a financial point of view, this initiative can be considered timid, compared to the American plan to support companies. of semiconductors and to establish manufacturing plants in the country, estimated at around 52 billion dollars. The European Union’s support plan for the sector amounts to 43 billion euros, but the British government estimates that the amount of $1.2 billion is appropriate for the size of the sector in the country, especially as Britain does not see economic feasibility in setting up factories in the UK, as the cost will become very high and is estimated at ten billion dollars, and therefore the strategy of the United Kingdom will depend on the support of semiconductors in the country, in addition to entering into foreign partnership agreements with other countries like Japan to buy semiconductors.
A strategic sector for the great powers
Saadeh adds that the semiconductor sector is very strategic for superpowers and technology companies, as these countries are in an intense race to develop smaller and more efficient semiconductors, which greatly affects the efficiency of the electronics used in communication devices, computers, transport and the health sector, in addition to other military and security uses, Britain has therefore decided to support this sector, and it is competing with countries like Germany and South Korea, according to British investors, especially as it previously faced disruptions in chip supply chains.
He pointed out that after waiting more than two years, UK chip companies will receive $264 million in government aid between 2023 and 2025, while $984 million will be distributed over the remaining years until 2033.
British support relieves business leaders
For his part, technology analyst, Alan Al-Qarih, said in an interview with “Sky News Arabia Economy” that the UK government’s mere development of a strategy to support the semiconductor industry is a comfort to the business leaders related to this industry in the country. , who warned earlier this year that they would move to the United States or European countries, in the absence of any government support for the industry, indicating that this step will stop the process from the United States, of China and other countries seizing Great Britain active in the industry of the semi-conductors, because of the successive setbacks that this industry underwent in the country.
Ideas and inventions are part of Britain’s strength
According to Al-Qarih, Britain has a strength in the semiconductor industry, which is its specialization in design, intellectual property, research and development, as it estimates that the amount of 1.2 billion dollars is the right number to drive chip-related innovations and inventions, which means that the country will focus on new inventions and ideas in The field of semiconductors is not concerned with the manufacturing process, because it believes that retaining this element of strength will strengthen its position as a major player in this industry, and keep at the forefront of new technological breakthroughs, which will certainly have a major role in the development of the economy and the creation of new jobs.
Britain’s restoration of its leading role
Al-Karih reveals that the UK government has spent more than $1 billion since 2006 on university research in the field of semiconductors, but this figure was spent in the absence of any management strategy for this sector, which has weakened the competitiveness of British companies. The imbalance has led to a brain drain in this area as companies now hope that the latest stage of support from the UK government will set the stage for the country to regain its leadership role in this industry.
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