The aim of the institute is to support key components of the government’s National Semiconductor Strategy to grow the sector, which is backed by £1 billion ($1.2 billion) of investment.

It will be an independent organization tasked with making sure chip researchers have the tools and infrastructure needed to drive their work forward and convert their innovation into market-ready products, subject to final checks.

It will also act as a coordinated entry point for technology businesses and international partners who want to work with the UK semiconductor sector to boost innovation, research and commercialisation.

“Semiconductors underpin all the technology that keeps our economy moving.”

Saqib Bhatti, UK Technology Minister

The global semiconductor supply chain is highly interdependent and concentrated, particularly in East Asia. The UK is working to mitigate these risks by enhancing its own capabilities and strengthening international partnerships.

“Semiconductors underpin all the technology that keeps our economy moving. Our strategy set out that we would grow the sector and make it resilient by focussing on what the British chip sector does best,” Technology Minister, Saqib Bhatti, said.

“Building on the early success of the strategy, the UK Semiconductor Institute will unify the semiconductor sector to focus our talented researchers on securing our status at the cutting edge of semiconductor science. This is a hugely significant milestone on our journey to becoming a science and tech superpower by 2030.”

The UK’s semiconductor industry is small but strategically important and as of 2024, the UK accounted for about 0.5% of global semiconductor sales.

Despite this, the UK is a leader in the fabrication of compound semiconductors​, which are critical for advanced technologies such as AI, quantum computing, and 6G communications.

Incubator for start-ups

Since the launch of the Semiconductor Strategy, the government has launched ChipStart, a pilot incubator for start-ups the technical and business help they need to help bring new products to market, and invested £22m ($28m) in two Innovation and Knowledge Centres in Bristol and Southampton to help bring new UK chip technologies to the global market.

The UK has also secured access to Horizon Europe’s €1.3 billion ($1.41 billion) Chips Joint Undertaking and made sure the UK Infrastructure Bank can invest its £22 billion ($28 billion) of financial capacity into semiconductor manufacturers.

“We were delighted to complete the largest European semiconductor venture raise in December 2023, co-led by UK Infrastructure Bank and M&G, with 70% of the round coming from UK investors. This funding will accelerate continued expansion of our manufacturing capacity in the Northeast of England taking volume from billions of flexible integrated circuits (FlexICs) to tens of billions per year,” David Moore, CEO, Pragmatic, said.

While the UK may not compete with the largest semiconductor manufacturers in terms of volume, it plays a crucial role in innovation and specialized technologies within the global semiconductor landscape.