A new report from the Centre for Emerging Technology and Security (CETaS) at The Alan Turing Institute called Semiconductor Supply Chains, AI, and Economic Statecraft, shed light on the global landscape of chip manufacturing, emphasising the proactive measures taken by countries like the US, China, the European Union (EU), India, and South Korea to bolster their semiconductor industries as part of broader industrial strategies.

However, the report points out a notable absence of similar initiatives in the UK, highlighting the need for the nation to build stronger partnerships to enhance its semiconductor supply chain.

CETaS emphasises the importance of leveraging the UK’s favourable relations with South Korea, particularly following the UK-Korea Downing Street Accord signed in November 2023. 

The report suggests that there is a possibility for synergy between the two countries in the semiconductor sector, with the UK excelling in design and Korea in manufacturing.

To address existing gaps in the UK’s semiconductor infrastructure, CETaS recommends the establishment of a National Semiconductor Institute, emphasising the need for a centralised point of engagement for international partners.

The report also raises concerns about the UK’s vulnerability to Chinese industrial policies, noting the potential impact on the UK’s emerging compound semiconductor industry. 

With China’s push for self-sufficiency and control over critical minerals essential for semiconductor production, the report warns of the risks posed to UK firms and national security interests.

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Furthermore, the authors highlight discrepancies in the UK’s semiconductor capabilities, noting the lack of investment in domestic fabs and specialised clusters forming around certain universities. This mismatch between output and industry requirements could hinder the UK’s technological advancement and competitiveness.

In addition to semiconductor manufacturing, the report addresses challenges in AI hardware, particularly regarding the dominance of Nvidia in the GPU market and the limitations faced by companies like Bristol-based Graphcore, focusing on intelligent processing units (IPUs).

Moreover, CETaS calls on the UK government to address the high costs of electronic design automation (EDA) tools, which hinder production timelines and scalability for smaller companies. The report suggests establishing a government-sponsored Design Competence Centre to provide essential support and training in EDA/IP.