UK Chip delays due to Donelan’s Maternity Leave

In another blow for the UK’s semiconductor industry, the government is delaying its proposed strategy as it seeks cover for technology secretary Michelle Donelan’s maternity leave, according to Westminster press reports.

Meanwhile the EU has agreed a €43 billion plan for its semiconductor industry in an effort to keep up with the US and Asia, after the Covid-19 pandemic exposed just how reliant the world is on the latter for semiconductor chips.

Government proposals for a British semiconductor strategy have been ongoing since last year and were widely thought to have been launched on Thursday, before being pushed back once again.

Semiconductor chips are crucial for powering electronic devices from smart phones, cars, and developing technology.

Speaking on the BBC Radio 4 Today programme, Simon Thomas, chief executive of Paragraf, a manufacturer of the material graphene that can be used for semiconductor chips, said that another delay is “no longer a surprise”.

Nevertheless, “it’s an incredible time of uncertainty for us,” he said. “Most businesses will tell you today that uncertainty is a killer, and in a business community like the semiconductor supply chain, where everything is very complicated, the lack of clarity really is impactful on what we do.”

Semiconductor chips are lacking for next-generation technology particularly, said Thomas: “That’s why we saw an increase in funding in the US and the EU in order to satisfy that demand.”

Clearly, the demand is there as a recent report by TechNavio found that the AI chips market is expected to grow more than 60% over the next five years, driven by the increasing adoption of AI chips in data centres.

Thomas concluded: “I’m delaying decision right now because I don’t know where it’s a good decision to stay in the UK in the future,” for his business.

At the end of last year, the UK government announced a research project in finding new ways to support the semiconductor industry stating that the UK is missing out on “inward investment at a crucial time” for the industry. “And we are competing with other countries,” the announcement read.

As for now, the UK strategy has been halted until No. 10 and the Department for Science, Innovation and Technology find cover for Donelan’s maternity leave, a Whitehall official told POLITICO.