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Technology minister Paul Scully has been in his current role since February 2023, when the prime minister created the Department for Science, Innovation and Technology (DSIT).
The global chip crisis, which was kickstarted by the Covid-19 coronavirus pandemic and has continued due to the US-China trade conflict and China’s latest export restrictions, is far from over.
Speaking to Computer Weekly, Scully says the chip crisis has led to every country “trying to work out how to get a supply chain that’s robust and resilient”.
“Making sure it is secure, that we can protect our national security, but also how we boost skills, as well to ensure that we can keep a competitive edge here in the UK,” he says.
This is partly why the government published its national semiconductor strategy earlier this year.
The strategy has been subject to criticism, however, in part due to the small budget Whitehall has allocated to it. Compared with the EU Chip Act’s funding of €43bn until 2030, and the US Chips and Science Act 2022’s promise of $52.7bn over five years, the UK pumping £1bn into semiconductors over the next decade might feel like a measly sum in comparison.
However, Scully says the key to the UK’s strategy is to focus on what the country does well.
“What do we do well? We do the design of semiconductors particularly well. We do the advanced packaging well. And we also have the world’s first compound cluster in South Wales,” he says.
Scully makes it clear that the UK is not trying to compete with countries like China or Taiwan, the latter being the world’s largest manufacturer of semiconductors.
“We’re not chasing big manufacturing. We’re not trying to build a new Taiwan. We’re not going to have a ‘chips act’ and chase subsidies,” he says.
Scully adds that a direct budget of £1bn over the next 10 years will be used to focus on areas like infrastructure, especially in supporting new companies, startups and early-stage scaleups.
“The cost of starting a business, especially in fabrication, is immense, so businesses are finding it hard to invest in prototypes,” he says.
This is being addressed by places like the Bragg Centre for Materials Research in Leeds, which allows companies to come in and build prototypes. A similar project is being run at Imperial College London. This is not only bringing down the cost of comparatively simple semiconductors, Scully adds, but also developing skills.
“Small companies can come in with an idea and they can leave with a semiconductor,” he says, adding that the government is currently looking at how it can support companies pragmatically.
In October 2023, the government also launched ChipStart, a £1.3m programme to provide funding to 12 UK semiconductor startups. The two-year pilot programme, backed by the government, provides early-stage companies involved in the design of semiconductors with the technical and commercial help they need to bring new products to market.
Creating a skills pipeline
With skills a big part of the picture, Scully says the government is working with the semiconductor sector to make sure “we have a really good pipeline of skills”.
However, the UK skills shortage continues to be an issue across the technology sector, including the semiconductor industry.
Despite an overall increase in the number of international workers migrating to work in the UK technology sector, inbound immigration currently accounts for just 1% of the five million people employed in this sector, which suggests more needs to be done to attract skilled workers from overseas.
The government is working with the semiconductor sector to make sure “we have a really good pipeline of skills” through the Global Talent Visa and home-grown talent
Paul Scully, Department for Science, Innovation and Technology
Scully says he is keen to make sure the Global Talent Visa can be maintained and developed, but adds that it’s a difficult area, as “we need to make that case to the wider public” and immigration, in general terms, “becomes a political football”.
“I’m just trying to remind people that illegal immigration and stopping the boats is hugely important, but it is so different from having tech entrepreneurs and having the brightest and the best powering the future of the UK economy. And when you talk about semiconductors, it is the future,” he says, adding that the world cannot function without them.
“Exponential growth has already started. We need people to make the most of that. We want to protect our global talent visas, we want to make sure that we remain attractive for people who want to work in the UK and have got those skills,” says Scully.
He adds that his department is “always speaking to the Home Office to make sure we can have a system that is better controlled and better managed”.
Home-grown skills are also part of the plan. The government is keen to focus on retraining, using apprenticeship schemes both within companies themselves, but also through schemes like AI conversion courses at universities. “Not only does it then start filling those gaps, but it actually gives you diversity, and I don’t just mean ‘tickbox diversity’, but diversity of thinking,” he says.
“So you’re not only filling the jobs, but you actually get a better quality product and service because you’ve got a wider range of people in that thought design process.”
The semiconductor strategy also focuses on how to get more doctoral courses and post-doctoral courses in universities to ensure those advanced skills are in place as well.
As part of this, the government has created a semiconductor advisory panel, which not only focuses on skills, but how to ensure critical British industries have safe and steady access to the chips they need to drive innovation and grow the economy.
The panel, which is chaired by Scully, includes investors, manufacturers and designers from the industry. It had its inaugural meeting in August 2023.
Reaching net zero
Another issue is that the semiconductor industry has a huge carbon footprint, as production is extremely energy intensive. On the other side of the coin, semiconductors also play a huge role in the government’s net-zero strategy as compound semiconductors are essential for power conversion and other renewable power generation methods.
“You need semiconductors to drive net zero because of all the technology that will actually bring costs down,” says Scully, adding that the technology in semiconductors will drive down the cost of things like electric cars and boilers, which will create a net positive.
He adds that there are also ongoing projects at places like the Bragg Centre, which are looking at ways to “reduce the energy input required to make semiconductors and advanced materials 10-fold, so that not only does it give you a better and faster product, but it also does it in a more sustainable way”.
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