The boss of chip manufacturer Pragmatic Semiconductor has called on the Government to provide substantial investment into the sector and help drive domestic demand.
CEO Scott White said the UK should not miss out on what he called a highly profitable, value-creating sector, asking the Government to back semiconductor manufacturing in the face of attractive incentives offered by the US and EU.
Last year Pragmatic closed a $125m Series C funding round to to fuel its expansion plans which include the current development of a 175,000 sqft factory in County Durham, and around 100 fabrication lines around the world over the next decade. The firm's plans aim to bring 125 highly skilled jobs to the North East, with hopes for more in addition if it can cultivate a supply chain hub around the Meadowfield site.
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Mr White spoke to BBC Radio 4's Today programme as a new report from the Institute of Physics (IOP) and the Royal Academy of Engineering found the UK semiconductor industry faced headwinds of "skills shortages, high costs and low public awareness". He said: "What's in the report is actually only the very tip of the iceberg. It looked at two very specific things which is the cost of design and skills, and there are a number of other challenges around successfully growing a global semiconductor business from the UK.
"From our perspective, being involved in manufacturing of chips, there's a challenge around how do we ensure we have the right support infrastructure and funding in place to make sure we can invest in the infrastructure we need to be able to grow our capacity effectively. And to do that in a way which isn't economically disadvantaged relative to other countries, such as the Far East that has historically had a lot of government support and more recently we've had the US and EU announcing their respective chips acts and providing a lot of strong support for manufacturing there."
Pragmatic already operates an production line for its ultra-thin, flexible chips at the NETPark site in County Durham. The firm employs about 200 people between that location and its Cambridge headquarters, with its chips used in a number of products including trackable packaging for the logistics sector.
Unlike some competitors, the firm's manufacturing process does not use silicon - a material which has been in global short supply and contributed to the well publicised shortage of chips impacting industries such as automotive manufacturing. Pragmatic has talked of its hopes to encourage the development of a supplier and research cluster surrounding its forthcoming North East factory.
The IOP’s director of science, innovation and skills Louis Barson said: "This strategically crucial industry can power the technologies and jobs the UK needs – but its future cannot be allowed to be one of domestic underinvestment and extended, vulnerable global supply chains. The future economy depends on ensuring we have unobstructed access to critical technologies like semiconductors – and that starts with a strong homegrown industry."
Mr White added: "Having taken money from investors we then have a duty to maximise value for those shareholders. If we can go and install a production line in the US and get significant government support under the chips act there, and we can't get similar support here, then it's very hard to make a case for why we want to continue to grow the company in the UK."
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