National semiconductor strategy · first published 18 May 2023
This is the UK government's long-term national strategy for semiconductors — the chips that power everything from phones to ventilators. Published in May 2023, it sets out a 20-year vision focused on three areas where the UK already has strength: research and development (R&D), chip design and intellectual property (IP), and compound semiconductors (chips made from materials like gallium nitride, used in electric vehicles and 5G). The strategy is not about building large silicon factories to compete with Taiwan; instead it doubles down on design, R&D, and compound semiconductors. For small businesses in or adjacent to the semiconductor sector, the most significant near-term measures are the UK Semiconductor Infrastructure Initiative — which aims to improve access to design tools, prototyping facilities, and manufacturing infrastructure — and a new incubator programme specifically targeting semiconductor start-ups. The strategy also continues funding through Innovate UK and the Engineering and Physical Sciences Research Council (EPSRC), and supports skills pipelines through apprenticeships, Higher Technical Qualifications (HTQs), T-Levels, and Institutes of Technology. The rules and funding in this document bind and are delivered by central government; wider sector and supply-chain businesses are the intended beneficiaries rather than subject to new obligations.
WHO THIS APPLIES TO
THE ENKII VIEW
The Infrastructure Initiative and incubator programme are explicitly designed to help start-ups and SMEs access expensive design tools, IP, silicon prototyping, and compound manufacturing — the very barriers that prevent small firms from scaling. SMEs already active in compound semiconductors, chip design, advanced packaging, or enabling technologies (sensors, photonics, power electronics) are best placed to benefit from the upcoming funding calls through Innovate UK and EPSRC. The strategy also signals sustained government appetite for doctoral and skills pipelines, which means SMEs who engage with Centres for Doctoral Training or Institutes of Technology now will be better positioned to attract talent and win future public R&D contracts.
1. Monitor DSIT (Department for Science, Innovation and Technology), Innovate UK, and EPSRC channels for launch details of the UK Semiconductor Infrastructure Initiative and the new incubator programme — both are explicitly designed to lower cost barriers for small firms through shared access to design tools, prototyping, and manufacturing facilities.
SMEs and start-ups in chip design, compound semiconductors, photonics, power electronics, or advanced packaging — The strategy commits to launching the Infrastructure Initiative and incubator to improve access to infrastructure for start-ups and SMEs, including design tools, IP, silicon prototyping, compound manufacturing, and advanced packaging.
2. Watch for and respond to Innovate UK's upcoming funding call to develop emerging semiconductor technology innovation capability — register on the Innovate UK funding finder and set up alerts for semiconductor-related competitions.
SMEs in the semiconductor sector or adjacent enabling technologies — The strategy states that Innovate UK and EPSRC will continue investing in the sector, 'including investing in a call to develop emerging semiconductor technology innovation capability.'
3. Engage now with your local Institute of Technology and relevant apprenticeship standard bodies to ensure your firm's specific skill requirements are reflected — the government is actively encouraging semiconductor employers to shape these programmes.
Semiconductor employers of any size considering apprenticeships or technical recruitment — The strategy commits to aligning apprenticeship standards, HTQs, and T-Levels to semiconductor employer needs, and specifically encourages 'more employers who serve the semiconductor industry to engage with Institute of Technology programme.'
4. Explore collaboration or membership opportunities with the Compound Semiconductor Applications (CSA) Catapult and the CSconnected cluster in South Wales — both are active vehicles for accessing government-backed R&D projects and industry partnerships.
SMEs working in or supplying to compound semiconductor applications (EVs, 5G, defence, space, quantum) — The CSA Catapult has 'initiated over £160 million of projects, working with over 100 companies across the UK' and will expand operations in 2023; the South Wales cluster expects its economic output to double by 2025.
5. Begin compliance preparation for the Product Security and Telecommunications Infrastructure (PTSI) Product Security Regime, which comes into force in April 2024, by auditing the security of hardware in your products.
SMEs that supply connected or consumer electronic products containing semiconductor components — The strategy states 'the world leading Product Security and Telecommunications Infrastructure (Product Security) Regime will come into effect in April 2024,' signalling a firm regulatory deadline for connected-device suppliers.
6. Review whether your business falls within the Computing Hardware or Advanced Materials categories under the National Security and Investment Act 2021, and seek legal advice ahead of the government's planned review of these definitions — the scope may change.
SMEs in semiconductor design, IP, or sensitive hardware that have received or may seek overseas investment — The strategy commits to reviewing 'the scope of Computing Hardware and Advanced Materials definition under The National Security and Investment Act 2021 (Notifiable Acquisition) (Specification of Qualifying Entities) Regulations 2021,' which could alter which transactions require mandatory notification.
7. When published, read and act on the government's forthcoming semiconductor resilience guidance to audit your supply chain exposure and put contingency plans in place before any future shortage.
SMEs that are dependent on semiconductor components in their supply chains (e.g. medical devices, automotive, industrial electronics) — The strategy commits to publishing 'semiconductor resilience guidance to improve sectors' understanding of the potential risks to semiconductor supply chains and the steps they can take to better prepare for future disruption.'
Every rule below quotes the official document verbatim.
The government is committing up to £200 million into the semiconductor sector over 2023–25, and up to £1 billion in the next decade. (UK semiconductor sector, central government funding, from 2023)
“we are investing up to £200 million into the sector over the years 2023-25, and up to £1 billion in the next decade”
A UK Semiconductor Infrastructure Initiative will be launched to improve SME and start-up access to design tools, IP, silicon prototyping, compound manufacturing, and advanced packaging. (UK semiconductor start-ups and SMEs)
“will launch a UK Semiconductor Infrastructure Initiative to improve access to infrastructure to boost UK commercial innovation for start-ups/SMEs: this could include design tools & IP, silicon prototyping, compound manufacturing and advanced packaging, including making start-ups more attractive to investors”
A new UK incubator programme will be piloted to support new semiconductor start-ups, providing access to design tools, prototyping, business coaching, and networking. (New semiconductor start-ups in the UK)
“we will pilot a new UK incubator programme to support new semiconductor start-ups in the UK and to encourage a more dynamic, commercial ecosystem. The incubator will lower the barriers to growth for new companies in the sector, providing access to design tools and prototyping, business coaching and networking opportunities”
Innovate UK and EPSRC will continue investing in the sector, including a call to develop emerging semiconductor technology innovation capability. (UK semiconductor sector businesses and researchers)
“the funding will also allow Innovate UK and the Engineering, and Physical Sciences Research Council (EPSRC) to continue investing in the sector. This includes investing in a call to develop emerging semiconductor technology innovation capability”
The government will provide further support for Centres for Doctoral Training (CDTs) in semiconductor-related fields through EPSRC. (UK universities and semiconductor employers engaged in skills pipelines)
“we will provide further support for Centres for Doctoral Training (CTDs) in semiconductor related fields, through EPSRC”
Occupational standards for apprenticeships, HTQs, and T-Levels will be aligned to the specific requirements of semiconductor sector employers. (Semiconductor sector employers in the UK)
“we will ensure that occupational standards for apprenticeships, higher technical qualifications (HTQs) and T-Levels meet the specific requirements of employers in the semiconductor sector to increase the flow of talented people into the industry”
The government is encouraging semiconductor employers to engage with the Institute of Technology programme, backed by £300 million of government capital investment. (Semiconductor sector employers in the UK)
“we are supporting the Department for Education's (DfE) Institute of Technology programme which has been backed by £300 million of government capital investment. We are encouraging more employers who serve the semiconductor industry to engage with Institute of Technology programme”
Plans to further support the competitiveness of the semiconductor manufacturing sector will be announced by autumn 2023. (UK semiconductor manufacturing sector, central government, 2023)
“we will announce plans by the autumn to further support the competitiveness of the semiconductor manufacturing sector that is critical to the UK tech ecosystem or the UK's national security”
The UK Semiconductor Advisory Panel will be formally launched at London Tech Week in June 2023. (UK semiconductor sector — industry, government, academia)
“We will formally launch the Advisory Panel at London Tech Week in June 2023 as part of our drive to promote the sector as a cornerstone of the digital economy”
The Product Security and Telecommunications Infrastructure (Product Security) Regime will come into effect in April 2024. (UK suppliers of connected consumer devices)
“the world leading Product Security and Telecommunications Infrastructure (Product Security) Regime will come into effect in April 2024”
The government will publish semiconductor resilience guidance to help sectors understand supply chain risks and prepare for future disruption. (UK businesses reliant on semiconductor supply chains)
“we will publish semiconductor resilience guidance to improve sectors' understanding of the potential risks to semiconductor supply chains and the steps they can take to better prepare for future disruption and minimise their exposure to risks”
The government will review the scope of Computing Hardware and Advanced Materials definitions under the National Security and Investment Act 2021 Notifiable Acquisition Regulations. (UK semiconductor companies subject to investment screening)
“we will review the scope of Computing Hardware and Advanced Materials definition under The National Security and Investment Act 2021 (Notifiable Acquisition) (Specification of Qualifying Entities) Regulations 2021”
Global semiconductor revenue was $601.7 billion in 2022, representing a 100.6% increase from 2012, with projected annual growth of 6–8% to 2030 and a forecast total market of $1 trillion by 2030. (Global semiconductor market — context for all UK sector participants)
“Global revenue in the semiconductor sector was $601.7 billion in 2022, representing a 100.6% increase from 2012. While the industry is characteristically cyclical, market analysis suggests that growth in the industry's aggregate annual growth could average from 6% to 8% a year up to 2030”
The global compound semiconductor market is forecast to grow from $67 billion currently to $350 billion by 2030. (Compound semiconductor sector globally — opportunity signal for UK SMEs)
“market analysis suggests that the global compound market is forecast to grow from $67 billion currently to $350 billion by 2030”
The Digital Security by Design programme brings together £70 million of government funding matched by £117 million from industry, building on academic research from the University of Cambridge. (UK semiconductor and hardware security sector)
“The Digital Security by Design programme - which brings together £70 million of government funding matched by £117 million from industry - builds on academic research from the University of Cambridge”
This briefing is enkii's interpretation of the official document — the official text always governs.
Source document © Crown copyright, reused under the Open Government Licence v3.0 via the GOV.UK Content API. enkii tracks every Procurement Policy Note and briefs changes the day they land — see all briefings.