CHIPS CHLLENGEComputer Chips: While U.S. and EU Invest to Challenge Asia, the U.K. Industry Is in Mortal Danger
U.S. semiconductor giant Micron, on the back of incentives in the recent U.S. Chips Act, is to invest U.S.$40 billion (£33 billion) during the 2020s in chip manufacturing in America, creating 40,000 jobs. The EU is also making moves to boost computer-chip manufacturing at home. In the U.K., however, successive governments have overlooked the importance of having a home-grown industry for this vital component. There is a clear absence of any strategic plan, and no way of riding on the coattails of the EU following Brexit.
U.S. semiconductor giant Micron is to invest U.S.$40 billion (£33 billion) during the 2020s in chip manufacturing in America, creating 40,000 jobs. This is on the back of incentives in the recent U.S. Chips Act, which has also unlocked major investments from fellow U.S. players Intel and Qualcomm.
The EU is also making moves to boost computer-chip manufacturing at home, having similarly decided to try and take share from Asia following the severe global semiconductor shortages over the past couple of years. Over 70 percent of chips are currently made in Asia, with precarious Taiwan particularly important, making around 90 percent of the world’s most advanced chips.
In the U.K., however, successive governments have overlooked the importance of having a home-grown industry for this vital component, which underpins not only computers and smartphones, but also things like cars, planes, satellites and smart devices. There is a clear absence of any strategic plan, and no way of riding on the coattails of the EU following Brexit. So what needs to be done?
The New Race for Chips
Micron’s decision to announce such a large investment in the U.S. is directly related to the Chips Act. The act provides U.S.$200 billion to build and modernize American manufacturing facilities, as well as promoting research and development in semiconductor technologies, and promoting education in STEM subjects to develop the next generation of chip designers.
The U.S. continues to control the majority of IP in semiconductors, but Asia’s dominant manufacturing capacity is rapidly growing on the back of investments from the likes of Taiwan’s TSMC and Foxconn, and South Korea-based Samsung. There is also a need to compete with China, which recently surprised the industry by demonstrating world-beating technology.
Earlier this year, the EU set out the scope of its own legislation to boost its share of production from 10 percent to 20 percent of the world total by 2030. It aims to promote “digital sovereignty” by supporting the development of new production facilities, supporting start-ups, developing skills and building partnerships. In total, the upcoming act should result in between €15 billion (£13 billion) and €43 billion (£36 billion) being invested in the sector.
