Economy Minister Vaughan Gething has criticised the UK Government’s semiconductor strategy warning that it risks “falling short” of the international challenge facing the UK. The UK Government unveiled its long-awaited national semiconductor strategy on Friday offering chip companies up to £1bn over the next decade in a bid to boost the domestic industry.
In a statement responding to the UK Government’s strategy, Wales Economy Minister Vaughan Gething said: “I’m pleased the UK Government have responded to widespread calls for action by publishing their long-delayed Semiconductor Strategy.
“However, I am concerned today’s announcement risks falling short of the international challenge facing us. Wales and the wider UK have the potential to meet more of the manufacturing demand that will only grow in this crucial sector. Our ambition must now match that opportunity to create more good jobs in a more balanced UK economy.
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“Direct support for business investment has to play a role in countering the drift of investment away from the UK. We will go on seeking greater investment in the sector in South Wales which boasts globally recognised strength.”
Semiconductors, or chips, are used in everything including phones, cars, computers, ventilators, and power stations.
As part of the UK Government’s plans, semiconductor companies will be offered £200m between 2023 and 2025, with funding used for projects such as improving access to specialist equipment, investing in the industry “talent pipeline”, and other business support.
The Westminster administration said it would build on the UK’s strength in design and compound semiconductors where British companies have a “strategic advantage”. There are already semiconductor clusters in south Wales and Cambridgeshire.
The strategy also plans to mitigate supply chain threats by working with other countries such as the US, Japan and South Korea. The threat of a war between China and Taiwan, which both produce over half of the world’s chips, has seen countries race to boost their own domestic chip industries and supplies.
The US and EU both launched funding packages last year. The US is offering $52bn (£41bn) of subsidies and incentives to encourage semiconductor companies to build fabrication plants in the US, while the EU has launched a €43bn (£37bn) investment plan for the sector.
Critics say the UK Government’s £1bn strategy is late to the game and not enough compared to what is being offered in the US and EU. UK Government Ministers have said the UK semiconductor industry is comparatively small when measured against Asian countries and the US.
CEO of Welsh tech firm IQE Americo Lemos said the strategy “rightly focuses” on the UK’s strengths but warned there was “no time to lose.”
In a statement earlier this week, Mr Gething said technology companies looking to invest in Wales were being put off from doing so by the UK Government’s delay in publishing its semiconductor strategy.
He also revealed that the Welsh Government was in “active dialogue” with several tech companies who have expressed an interest in investing in Wales.
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