Global chip production is heavily concentrated across Asia. While most countries are now focused on accelerating their digital and data transformations, creating competition of who can develop and equip their citizens the fastest with security-preserving digital technologies, countries like Taiwan and Japan are miles ahead in a one-man race.
Paul Scully MP, appointed under the Department for Science, Innovation and Technology (DSIT), voiced his view that Britain should not strive to compete with APAC leaders and level the playing ground to create a broader market of global players in chip-making.
Instead he suggested that the UK’s chip and semiconductor industry should better focus their efforts on niche manufacturing, The Financial Times reported. Independent, smaller-scale chip production will not risk undermining the standout leaders in this market, located in the APAC region and replicate solutions.
This indicated that the UK is not willing to participate in a race emerging between super-bodies in Asia, U.S. and Europe to build competitive chip-making facilities to compete with the rate of their digital transformation.
The U.S. and Netherlands are also considered leaders that invest heavily to secure their share in the chip market, as well as Taiwan, South Korea and Japan. There is also interdependence between these established producers that rely on each other for different types of chips, proving that the production system is “complex, integrated, and not easy to disentangle” with countries not mastering all chip elements or variations.
The main global semiconductor producers have a codependent relationship and are also large chip importers.
The UK’s investment funding of just £1 billion to offer British chip companies, unveiled in May, shows a significant difference with financial resources of APAC leaders to invest in infrastructure. The investment which has been allocated will just focus on design and “advanced packaging”, leaving criteria such as data storage and capability and security unanswered for in Paul Scully’s comments.
The UK is a strong link within the chip supply chain which is not solely based on chip production.
“We are not going to recreate Taiwan in south Wales,” he said. “It’s just not going to happen.”
Chips are accelerated in today’s digital and data economy for powering information-orientated insights and ultimately helping in many industries for identification.
Scully is co-chair on the government’s imminent semiconductor advisory board which will oversee the national strategy, ensuring that the UK leverages its opportunity instead of replicating mass produced chips.
The panel, including some opponents to the UK’s chip policies, does not aim to discourage or block big chip companies from continuing to grow.