Britain’s semiconductor strategy goes AWOL as U.S. and E.U. splash billions.


LONDON — As nations worldwide scramble to secure crucial semiconductor supply chains over a fear of relations with China, the U.K. is falling behind.
The COVID-19 pandemic revealed the world’s heavy reliance on Taiwan and China for the most advanced chips, which power everything from iPhones to advanced weapons. For the past two years, amid mounting fears that China will kick off a new global security crisis by invading Taiwan, Britain’s government readying a plan to diversify supply chains for critical components and boost domestic production.

Yet according to individuals close to the strategy, the U.K.’s still-unseen plan — which cut its publication deadline last fall — has suffered from internal disconnect and government chaos, setting the country behind its global allies in a crucial race to become more self-reliant.
A lack of knowledge and joined-up policy-making in Whitehall, a period of intense political upheaval in Downing Street, and new U.S. controls on the export of refined chips to China collectively stymied the U.K.’s effort to develop a coherent plan.

The way the strategy developed “is a mistake,” said a former senior Downing Street official.
Falling behind
During the pandemic, semiconductor demand outstripped supply as consumers flocked to sort their home working setups. That led to significant chip shortages — soon compounded by China’s strict “zero-COVID” policy.
Since a semiconductor fake plant is so technologically complex — a single laser in a chip lithography system of German firm Trumpf has 457,000 parts — concentrating manufacturing in a few companies helped the industry innovate in the past.
But everything altered when COVID-19 struck.

Governments suddenly woke up to the fact that — hang on a second, these semiconductor things are pretty significant, and they all seem to focus in a small number of places, said a senior British semiconductor industry executive.
Beijing’s liftoff of a hypersonic missile in 2021 also sent shivers through the Pentagon over China’s increasing ability to develop advanced AI-powered weapons. And Russia’s attack on Ukraine added to geopolitical uncertainty, upping the tension between governments to onshore manufacturers and reducing reliance on potential conflict hotspots like Taiwan.

Against this background, many of the U.K.’s allies are investing billions in household manufacturing.
The Biden regime’s CHIPS Act, passed last summer, offers $52 billion in subsidies for semiconductor manufacturing in the U.S. The E.U. has its €43 billion plan to subsidize production, although its stance is not without critics. Emerging producers like India, Vietnam, Singapore, and Japan also make headway in their multi-billion-dollar efforts to foster domestic manufacturing.

Now the U.K. government is under mounting pressure to show its hand. In a letter to Prime Minister Rishi Sunak, first reported by the Times and obtained by POLITICO, Britain’s semiconductor sector said its “confidence in the government’s ability to address the industry’s vital importance is steadily declining with each month of inaction.”
That observed the leak of an early copy of the U.K.’s semiconductor process, reported on by Bloomberg, warning that Britain’s over-dependence on Taiwan for its semiconductor foundries makes it vulnerable to any invasion of the island country by China.

Taiwan, which Beijing thinks is part of its territory, makes more than 90 percent of the world’s advanced chips, with its Taiwan Semiconductor Manufacturing Company (TSMC) essential to manufacture British-designed semiconductors.
U.S. and E.U. action has already drawn TSMC to begin building new plants and foundries in Arizona and Germany.
“We critically depend on companies like TSMC,” the industry executive quoted above. “It would be catastrophic for Western economies if they couldn’t access leading-edge semiconductors anymore.”

Whitehall at war
Yet there are concerns inside and outside the British government that key Whitehall departments whose input on the strategy could be crucial left out in the cold.
According to observers, the Department for Digital, Culture, Media, and Sport (DCMS) is preparing the U.K.’s plan and has fiercely maintained ownership of the project. DCMS is one of the minor departments in Whitehall and is nicknamed the ‘Ministry of Fun’ due to its oversight of sports, leisure, and tech-related issues.

“In other countries, semiconductor procedures are the product of multiple players,” said Paul Triolo, a senior vice president at U.S.-based strategy firm ASG. It contains “legislative support for funding major subsidies packages, commercial and trade departments, R&D agencies, and high-level strategic policy bodies tasked with improving supply chain resilience,” he said.
“You must all parts of the U.K.’s capabilities, diplomatic and security services. You need everyone operating together on this,” said the former Downing Street official. “There are massive national security aspects to this.”

About the author

Olivia Wilson
By Olivia Wilson


Get in touch

Content and images available on this website is supplied by contributors. As such we do not hold or accept liability for the content, views or references used. For any complaints please contact Use of this website signifies your agreement to our terms of use. We do our best to ensure that all information on the Website is accurate. If you find any inaccurate information on the Website please us know by sending an email to and we will correct it, where we agree, as soon as practicable. We do not accept liability for any user-generated or user submitted content – if there are any copyright violations please notify us at – any media used will be removed providing proof of content ownership can be provided. For any DMCA requests under the digital millennium copyright act
Please contact: with the subject DMCA Request.