TechUK has issued an updated review of its UK Plan for Chips, urging the government to move faster to implement its National Semiconductor Strategy.
Two years on from its initial report, techUK said it had welcomed the publication of the strategy in 2023, which incorporated key recommendations from its original UK Plan for Chips.
However, the trade body said that while the strategy set a strong vision, progress since its launch has been too slow and decisive action is now required.
It believes the government needs to do more to retain the UK's strong position in chip design intellectual property, building on its strengths with targeted policies and financial support.
There should be more incentives for investment into new areas of growth, including advanced designs, emerging technologies and end user readiness, said techUK.
Despite having the world’s third-largest tech sector, many UK semiconductor startups struggle to secure large-scale private investment. As a result, the UK needs a dynamic investment ecosystem that supports semiconductor innovation, providing access to both private capital and public funding.
It should also capitalise on UK strengths in the global supply chain by forming strategic international partnerships, fostering joint research and development, and securing investment and innovation opportunities.
"The UK has a unique opportunity to lead in the global semiconductor landscape, but success will require bold action and sustained commitment," said Laura Foster, associate director for technology and innovation at techUK.
"By accelerating the implementation of the National Semiconductor Strategy, recognizing its role as a key strategic technology and underpinning its importance within the Industrial Strategy, we can unlock investment, foster innovation, and strengthen our position in this critical industry."
In a report last year, the government found that dedicated semiconductor companies generated £9.6 billion in revenues in 2022, around 2% of global semiconductor revenues. Of this, more than 40% was generated by UK-headquartered companies, with Arm the biggest.
Dedicated companies employed around 15,000 people in the UK, with UK-headquartered companies accounting for more than 60%.
But while they've secured a total of £1.7 billion in grants and fundraising so far, around 70% of the total went to just five companies.
Last September, the government handed out a total of £11.5 million to 16 semiconductor scale-ups working on innovations including medical technology and improvements to phone screens.
However, techUK wants to see a bit more urgency from the government to maintain its position and build on its strengths.
"We must act at pace to secure the UK’s semiconductor future and as such our technological and economic resilience," said Foster.
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