MPs Urge Government Support For Chip Industry

chip, semiconductor

MPs urge government to publish delayed semiconductor strategy as US, EU and China push ahead with chip plans

A group of MPs has urged the government to publish its delayed semiconductor strategy and to bolster support for the chip industry in order to avoid putting the British economy at risk.

The government initially said it would publish a semiconductor strategy in “autumn 2022” but has so far declined to say when publication would take place.

The publication of the report by MPs on Parliament’s business committee follows ongoing chip shortages that have affected the automotive and other manufacturing sectors and have prompted massive investment plans by the US and the EU to encourage the local construction of chip fabrication plants.

chip, semiconductor‘Significant risk’

“The government is putting UK plc at significant risk by failing to take action in support of the semiconductor industry,” said Labour MP Darren Jones, who chairs the committee.

“Other countries are investing in the resilience of their semiconductor supply chains yet ministers in the UK can’t even publish their semiconductor strategy on time.”

The report found that support from the government did not seem to be “anything like the scale which is needed to make a real difference, or in line with a clear strategy from ministers”.

As the UK has no capacity for manufacturing the most advanced chips, ministers argued the government should focus instead on forging partnerships with allies such as the US and Taiwan to secure inward investments that would be part of their supply chains.

Nexperia sale

Earlier this month the government told the owner of the UK’s largest chip fab that it must sell at least 86 percent of its shareholding in the interests of national security.

The Newport Wafer Fab in South Wales was acquired last year by Netherlands-based Nexperia, which is in turn owned by China’s Wingtech.

Nexperia has said it will appeal the decision.

The MPs said in the wake of the Nexperia decision the government must engage with potential buyers to secure the future of the vital site.

Industrial plan

The government said it would publish its strategy document “soon”.

“We are reviewing our domestic capabilities and working closely with industry and international partners to develop a new semiconductor strategy which will grow the sector further and make sure our supply chains remain resilient,” a government spokesperson said.

“Our strategy will be published as soon as possible.”