UK PM Sunak plans to allocate just £1bn to semiconductor industry UK Prime Minister Rishi Sunak is said to be preparing a £1 billion ($1.24 billion) investment for the country’s semiconductor industry, as chip companies threaten to relocate elsewhere if sufficient government support is not forthcoming. The British government has dragged its heels over a semiconductor strategy for UK industry …
-> The British government has dragged its heels over a semiconductor strategy for UK industry
Semiconductor work requires intelligent brains and skilled staff. The government knows about spin and has many ministers who could be labelled as 'turd polishers" or more politely as "chair polishers". It knows how to look after its friends in the city. But actual work which makes something of value? That's a different story. They are still infected with the disease of John Harvey Jones whose whole mantra was "do not build it, buy it in". Yes, his message was "don't make things, outsource all the knowledge of decades or even centuries".
Manufacturing requires energy and the UK has the amongst the highest energy prices in Europe. Such things are lost on the sort of people who put duck houses and personal bookshelves on their expenses. They just don't have a clue. Too many lawyers and too many PP&Es are MPs. Their heads are full of useless knowledge.
Brexit Britain with be a Semi-conductor Taker.
Good job those plucky people at Acorn Computers - which sired ARM - did not take that view in the 1980’s … and that’s when there actually was some Chip Manufacturing here - esp. in Silicon Glen.
With the right support, what Intel have in Ireland could be pretty much anywhere. Inc UK.
Like everything else woefully unambitious and half-cocked.
This is another example of the modern economy, where people are managers or experts who think because they say do it, thats the magic ingredient. Advertising is another example of this, its not about intelligence but rather the advert bullshitting the public because they are so clever.
One vital growth market to master and lead are those ones, for there are many variations available for live field use on both the scene and the theme, which can use silicon technology to divert assets and flash cash and international interest in order to crash as big a selection of city banks and financial services as one would wish to choose and reduce to rubble in the bubbles of their own making.
The simple fact that they [banks] never have money of their own deposited and subject to targeted risk and customer loss, has them always struggling to remain attractive and thought safe and secure from bond market attacks and international currency defaults.
Of course, being able to stop/prevent/put on hold such an activity is a very attractive invisible export earner for such an entrepreneurial spirit/stealthy enterprise too with practically zero damage done to infrastructure being appropriately rewarded with a flash cash offering to guarantors as be mutually agreed as fair and acceptable beforehand ?
* The simple cost of doing complex business
"By contrast, it is claimed that Britain’s strategy is likely to focus on how to scale up existing chip design and manufacturing companies, secure supply chains and address skills shortages, rather than joining the global subsidy race, which may go some way to explaining the paltry sum."
Good to see some common sense to not join the subsidy bandwagon
@AC
"Common sense? In what way? Could you expand on what the snippet you quoted means in reality for microelectronics in the UK?"
The world is locked into a competition of pissing money on manufacturing, that being their focus and the money sink. We could join the crowded market and probably be beaten out of it after spending more taxpayers money. Or we dont. What it means for macroelectronics in the UK is we focus on other things instead of the narrow focus others are doing.
Quite right. £1 Billion sounds like a small amount if you're Samsung or Taiwan Semiconductor (or the PM's in-laws) but it is a lot of money if you're the Minister's old school pal, 'Toppy', who isn't too clear on what a semiconductor is but is willing to give it a go or that jolly good bloke he met down the pub who's willing to put the fab in a lockup rented from the Minister's wife.
"Narrow Focus" - not sure what you mean. I used to work in a company that made stuff - aerospace comms for commercial and miltary. We took in raw materials and turned them into market-leading tech products that we sold round the world - design, prototype, test, qualify, machining, plating, PCB manufacture, nuts to soup stuff employing a couple of thousand people. First they outsourced the cleaning (we started to see dendritic growth on our PCBs soon after this). Then they outsourced the canteen ( you used to be able to get a bacon sarnie for breakfast - they actually cooked on site) and suddenly you couldn't find anyone around lunchtime cos they'd gone out to avoid the crap "service" provided by Compass and after a year they had to renege on their contract and put the prices of all the food up by 25% because so few people ate it. Then IT went - if you needed a new keyboard you had to fill in a form and someone would drive 100 miles to install one for you. Then the plating shop went - together with the sales and profit it made from selling its services to local firms at market value. Then the machine shop went - and the reject rate of the aluminium-backed RF circuit assemblies went from 0% to 50%. Then the PCBs were outsourced and if you needed quick rework for some prototype testing it took a written, approved instruction, a P/O and a two-week turn around (before, you wandered into the PCB area and they did it while you waited). Every time something turned shitter the supply chain director and accountant were there with a sheaf of spreadsheets proving it was cheaper to outsource. Last I heard there were about a hundred people left in the company doing..... well, to be honest, fuck knows.
@AC
""Narrow Focus" - not sure what you mean."
What I mean is the US, Asia and EU are throwing money at fabs and such. They are battling each other in an expensive game of attracting the limited talent to build capital intensive manufacturing which will then battle each other on driving the prices down. A lot of money in to produce something of lower value. Why should the UK compete in what looks to be a losing game when instead the UK can go do other things?
One good argument has been the security of supply, but this is not so much an issue as instead of relying on Asia, we will have the EU and US churning out product too.
The story you wrote is very interesting and could be a series of bad decisions which would lead to the business being out-competed. But why would they be trying to reduce costs so aggressively? Was the business struggling to compete or just bad management? Now imagine either of those two options but the gov hands them free money (from the tax payer, which would be you) to still do the same actions.
When the gov throws money at something it doesnt automagically improve. As a general rule it gets worse. The gov can always steal a few more pennies while investors have to work and earn their money to fund projects. I am sorry to hear about the place you worked though, I have also seen bad management mess previous jobs.
You have just described where manufacturing has gone in this country ....
People that 'don't know' squeezing the skill out of everything by sub-contracting everything outside, to the cheapest supplier, and wondering why the quality is crap !!!
The UK is in terminal decline .... lead by donkeys/scam merchants !!!
The populace will once again grumble a little bit and accept it all !!!
We need to do something urgently to stem this decline before it is too late.
(This is not yet another BREXIT complaint .... it is 'done and dusted' and we need to get over the shock and grab the country by the throat and wake up to the direction we are heading in.)
We have the skillls .... just .... but the will seems to be somewhat weak (back to our useless politicians yet again !!!).
Chocks Away ... Per Ardua ad Astra and Tally Ho! Epic Journeys and Titanic Missions for Crash Testing Dummies
The UK is in terminal decline .... lead by donkeys/scam merchants !!!The populace will once again grumble a little bit and accept it all !!!
We need to do something urgently to stem this decline before it is too late ...... Anonymous Coward
Amen to that, AC. Wanna try something with everything quite different? Cometh the hour, cometh a man bearing otherworldly gifts ..... You only get what you pay for, and some things are worth a pretty penny
And a ACID (atomicity, consistency, isolation, durability) test for UKGBNI leaderships and Valiant Warrior Lords alike to pass and prove themselves worthy of Prime Ministerial Materiel and both virtual and practical Almighty AIdDevelopment Help ..... Remote Alien Foreign Assistance, methinks ..... with the result of that opportunity and test lost on a gathering of incompetent politically incorrect wonks, being gracious transit and delivery of the same leading opportunity to similar enterprises elsewhere alien and foreign. 'Tis only fair
So, in a nutshell, is that at least UKGBNI Parliamentary Democracy and Ministries of Defence and Secret Security Services called out to either put up and get with the program, or forever be reminded in the future by A.N.Others that in the past they were nowhere near being good enough for Overwhelming Fields of Remote Greatness and Great Game Changing Endeavour.
Yes, that's exactly what is currently at stake ..... to be exercising Novel Power and NEUKlearer HyperRadioProACTive IT Energy in a leading position or be overcome by its IT and AI Command and Control.
How well do you think they will fare in such a test? Go on, have a guess and get a laugh.:-) It's only your lives they are messing around with.
@AC
"What other things? Oooh! Is it crypto?"
I dunno what other things because there are so many different things out there it is impossible for a person or small group to know. That is one of the reasons government command economy doesnt work.
"(And what is "macroelectronics" in this context?)"
Whatever the original poster means it to be. It doesnt affect the discussion.
"I dunno what other things because there are so many different things out there it is impossible for a person or small group to know. That is one of the reasons government command economy doesnt work."
That's a big cop-out on your part.
"Whatever the original poster means it to be. It doesnt affect the discussion."
And no, you've introduced a nonexistent term, "macroelectronics". This hints that you actually know very little about this industry at all. Wouldn't you say?
@AC
"That's a big cop-out on your part."
Why is that a cop out? That is the whole point. This is the very simple fact that destroys the idea of a small group trying to decide what is going to succeed and trying to control the billions of trillions of small day to day transactions that makes up every day life. Misunderstand that and you destroy the economy.
"And no, you've introduced a nonexistent term,"
You seem to have seriously misread the thread. I was quoting a previous AC (guessing it wasnt you?). They introduced the term.
@jollyboyspecial
"@codejunky you're the one who introduced the word "macroelectronics" to this thread. As such you're the OP."
Damn, just reread and yes I made a spelling mistake in response to the OP. Sorry to the commenter's who followed who were unable to understand such and instead decided to yabber on as if they were onto something. FFS
I'm wholly with Codejunky on this one.
Bearing in mind Intel have had great difficulty in going under 12nm, The idea that a UK start-up can get close is a joke. (I think our best is over 100nm at the moment)
If the money is to buy a replica foundry (like the US buying from TSMC) it will be dependent on complex international supply chains anyway, let alone the long arm of US control of tech.
With all this new subsidised capacity hitting the market in around 4 years? I don't see a happy end for a marginal fab on a small island.
Now, if you have £Billions to invest in tech ... I've got just the idea... And I can guarantee it will perform better than a UK FAB.
<quote>White told us that if reports of the £1 billion pledge are correct, then the full force of the investment will only be felt if it is used correctly. </quote>
Sure £1billion spent well can be great and can be the seed for future investment, but I assume by spent well Mr White thinks Mr White gets most of it or he is going to take his ball and go play in the USA?
@Howard Sway
"Wonder which countries this well educated workforce will move to in order to make use of their knowledge? The ones with the big subsidised chip industries I presume......"
Thats great news then isnt it? Instead of the UK competing to make an expensive welfare system we let the other countries do that and we focus on producing marketable products?
Previous attempts of UK government funding in other industries have not turned out to be quite as substantial as promised. The reason being that there body entrusted with that funding will often spend a chunk of it internally. How much of the billion will be available for companies to spend?
Then there's the red tape, whenever the civil service are involved there's always plenty of that. They might promise funding to individual companies, but the money will always be tied up in miles of red tape meaning that by the time the money is available to spend it's already too late for it to make a difference.
The problem with "real" scientists is that they often get carried away about their shiny new toys (ideas) and ignore reality or usefulness. You need a mixture of scientists, businessmen (commercial) and manufacturers (especially operations & logistics/supply chain). You might even want a banker to advise on where to keep the money until you need each bit of it.
Also, before you advise ringfencing £50bn can you a) work out where its coming from and b) calculate the impact on taxes.
Anyone else reckon most of that money will end up in shareholders pockets, or grants that see failed startups being sold outside the country or bought by the UK taxpayer ?
Come on politicians, do the people of the UK a solid and think about the long term, invest in this country, let's actually make products here, and perhaps we can be self sufficient in food, as we once were. Not held to ransom by other countries.
Anything is possible if you all work together.
Now that Ive woken up, what a lovely dream tvat would be....
Why should the government be investing in any private company rather than working to foster an environment where business want to be? Just eliminating the red tape that companies must go through to get a location through planning, permits and inspections would be a giant leap. The same goes for employment laws that protect the employee without making it difficult for companies to comply with the regulations. Tax code is also getting to be such a Sargasso Sea of complicated with huge fines for getting it wrong that the risk of making one mistake has companies looking to other locations. There are a large number of people in the UK, but not enough that selling a product there with import tariffs added is a big deal
If corporations could site a facility in the UK and pay lower or very competitive corporate taxes, the State still does well as the employees and their spending generates tax revenue. Work could be done to guide company locations through designating regions where corporate taxes are higher or lower. This allows a way to keep control on having big clumps of activity in one place and next to no employment in others. It also keeps there from being bottlenecks in infrastructure.
“What would we do with it? We’re not going to build high volume fabs to compete with Taiwan, South Korea, or the USA, or even China,” he added.
Yes, that's the spirit. This comment explains exactly why we don't, and never will, have meaningful investment into the UK tech industry.
I'm in the process of trying to move back to the UK from the US, for reasons other than the fairy stories people make up about America.
What is true is the work/life balance in the UK is far superior. Not perfect, but infinitely better than the always-on life in the US.
What is also true is the money invested into UK tech is shameful. This is not just about becoming world leaders in whatever segment we decide to invest in. It's also about attracting and keeping talent. Because if you don't have the funding, you can't pay the wages - and that is as serious a handicap as any. If you could just move your career from the UK to the US, doing the exact same job you're doing now, you could expect to bring home about 30% more than you do now. Factor in cost of living and that actually goes up if you move to the right location.
So yeah, work/life balance sucks. But because there's investment - real investment - you will probably own your own home, own a nice car, have money to spend on cool toys and be able to go on nice "vacations".
You're missing the point. Other countries are doing it. The EU, the US, Japan, China do this stuff all the time. If governments don't subsidise industries they can't compete and they fail. It's an unfortunate part of late capitalism. Sadly it's impossible not to join in, if you don't join in you'll soon have no industry left.
One of the arguments given for leaving the EU was that state aid rules were very restrictive. State aid rules in the EU may be restrictive, but they are also not well policed. Some countries (Ireland for example) are well known for giving tax breaks to foreign companies to encourage investment, this is against EU rules but goes ignored. Other countries (France and Spain spring to mind) give companies aid to bid for work in foreign countries, again this is against the rules but ignored. The irony is that Brexit was supposed to allow the UK to do this as much as we wanted, but unfortunately the government either don't seem to have the money to do so or more likely do not have the political will to do it properly.
We were one of the few in the EU that mostly obeyed the rules. Germany is another one that went around the rules a little too often.
China gives companies massively subsidised postage to ship their cheap tat to the west. You can't compete with that!
But as someone said elsewhere this is just a giant pissing contest between the US, EU and China. I don't actually see it being a good thing in the long run as we still need fabs producing legacy node sizes and no-one is going to give funding to a company wanting to setup a 60nm fab. It is all going to 'new and shiny' and 'world beating technology'.
After everyone saw the meaning of life and realised that when you lease back the machine that goes ping from the company you sold it two then it all comes under the monthly budget and not the capital account and suddenly your company looks much better on paper in the short term. And that is all anyone cares about now.
Why have a huge ship on the books depreciating and eating into your bottom line?
"And that is how you make a profit!"
That's how the tax system is setup. It makes more sense to play games to make sure something winds up in the right slot to garner the biggest tax advantage. In the short term, it makes sense to sell your facility and lease it back so the payments are tax deductible and some tax authority is making a new assessment on the value of that property every year for tax purposes, ie: the government needs more money so the value of property goes up so it can be taxed more.
Will the £1bn be given to a company with no assets and no experience in the sector, set up just last week and owned/directed by someone he knows from university but is as yet unknown to us? ... Electric Panda
At the risk of UKGBNI Business and Conservative Party shenanigans being thought effectively rendered as submissive cuckolds of AI [Alien Interventions] and AI itself correctly earning a MRDA moniker, £1bn granted to a Provider of Premium Primacy in NEUKlearer HyperRadioProACTive IT for Global Operating Devices easily remotely delivering the likes of The AWEsome* Elephant and Unicorn in any Situation Room** .... https://forums.theregister.com/forum/all/2023/04/27/future_of_warfare_rsa/#c_4656463 and Who Dares Win Wins ….. with Special Advanced IntelAIgent Research Services and Alien Sources. ..... https://forums.theregister.com/forum/all/2023/04/25/ot_ethos_critical_infrastructure/#c_4655917, can immediately halt its rapid virtual transit and exclusive proprietary intellectual property investment in interested and interesting foreign parties elsewhere, but only if it is not agreed to be exclusively bought for sale from elsewhere as a national treasure and fabulous fabless invisible export earner.
And whenever one is advised that such a provision has dual/multiple use facilities with many of an almighty overwhelming WMD ability/utility, is such then an extremely attractive bargain at such a minimal cost with its true value in real terms being honestly priceless.
First come, first served is fair in Greater IntelAIgent 0day Games Play ..... although one cannot argue that having to translate the English and share all of the above text in a different language that others, foreign and alien, can easily and accurately understand and respond to, may give Wild Wacky Westerners a slightly leading edge time advantage, but such is only realised if they act correctly upon the Information for IntelAIgents freely shared ..... and that is far from being guaranteed and likely given their present dire straits state in international and internetional affairs.
Do you think that to be fake news, El Reg, or much more a new type of exclusive scoop on an Earth-shattering, novel virtual ground-breaking AIdDevelopment for Trade and Markets in IntelAIgently Designed Entities Programming ProgramMING Projects ...... Mined Internetworking Network Games ‽
Ps ... Don't bet on the former, unless you can afford to lose your shirt and have anything effective to offer as a counter. :-)
“The UK does not have a semiconductor industry of any consequence from a size point of view (and never will have)" and "“What would we do with it? We’re not going to build high volume fabs to compete"
Why not? What is it that prevents us from doing this? Taiwan has a third of our population, yet manages to produce the majority of the world's semiconductors. Why can't the UK produce some as well?
This seems like circular logic. We shouldn't invest in producing chips, because we don't current produce chips...
What an odd attitude.
We'd only invest in 'new shiny tech' which is only good for a portion of the chip market. The established chip manufacturers have the new shiny stuff but they also have a lot of their older equipment churning out the less interesting but very critical smaller chips. You're not going to pour billions into a fab to make chips that sell for <£5. With all the money sloshing about we are going to see a glut of leading edge node capacity while we struggle to get the chips we actually need.
@localzuk
"Why not? What is it that prevents us from doing this? Taiwan has a third of our population, yet manages to produce the majority of the world's semiconductors. Why can't the UK produce some as well?"
We could. We can drop minimum wage to a much smaller amount, We can ditch environmental restrictions which increase the costs. We could make ourself like Taiwan, is that what you would want?
@localzuk
"Average salary in Taiwan is around the same as the UK. Fairly certain you aren't running high-tech chip fabrication with minimum wage workers."
Ok. So the high tech chip fabrication workers may be on better than minimum wage. What about all of the support staff? Everyone down the chain that supports the work which adds to the costs down the line.
"But so is not having any strategic production capability in our own country."
We dont grow enough food to sustain the country. Yet we are all better off, have more choice, better prices and great availability due to importing from the world. Beats standing in a field all day for strategic capability.
@Headley_Grange
"Which "we" are you talking about? I bet those African farmers aren't driving around in Range Rovers and going on Young Farmers' treasure hunts of a weekend."
Those African farmers aint starving to death which would probably be the outcome if they didnt have rich countries to buy the food. So we is both participants of the trade
@AC
"I'm glad to see this poster holding up their hands to their chan-style race-baiting posts. There is hope for the world."
Assuming you actually assumed this to be race-baiting and not just a troll, it is in your mind. You might want to reread the posts which were about trade, not skin colour. I doubt Headley_Grange had any racist intent when he mentioned African farmers, but instead mentioning the farming trade in which I responded discussing trade. If you see race or colour or burdens that is your issue
"Could somebody tell what is that most important thing that makes US innovate so well?"
1. They are bigger than us.
2. They have more money.
3. They are willing to take more risks.
4. Winners are allowed to win & grow as that is the 'American Way" !!!
5. They are willing to 'game the system' if that helps !!!
6. Everyone in America knows the rules of winning & losing !!!
7. Do I need to go on ???!!! :)
In semiconductors the UK is a flyweight that cannot, nay should not enter the ring of semiconductor heavy weights. Besides the UK's puny £billion does not buy entry into this industrial poker game, not that I have any confidence that it could play a good hand if it could afford entry. There is the temptation to say, we should just sit back with our £ billion in our pocket and watch the heavy-weight stalwarts US, Japan, EU, Taiwan, China, and Korea pummel each other to the ground and then opportunistically ride in to pick up bargain pieces with our £billion. Unfortunately, it doesn't work that way. The spoils go to the winners with little or no crumbs for either losers or nonparticipants.
Our minimal participation in this industry stems from choices made decades ago. Choices driven more by ideology than by commonsense. The UK was a richer country when Taiwan was taking its tentative steps in seeding a semiconductor industry. Make no mistake, this seeding was planted by the Taiwanese government because, in a small country, only the government can risk the amount of capital required. The East Asians have perfected the template for industrial creation, while the US and Europe continue to look at it as some arcane mysterious entrepreneurial process driven by some Superman Bill Gates or Elon Musk.
East Asian industrial policy understands that in an industrial sector's early development, it can't - or shouldn't compete with the US because it would require access to the US market for growth. So they adopt the strategy of the pilot fish to the US shark. A pilot fish seeks a symbiotic relationship with a bigger predator for its survival and presents itself to the shark as being useful in cleaning its teeth, ridding its skin of parasites, and even wiping its anal passage. The East Asians do this for the US until they find an opportunity to share the shark's meal, which they dress up in symbiotic terms.
This is what TSMC did, it presented an architecture of operation to the US where it would bear the cost, difficulty, and environmental consequence of chip fabrication allowing US companies to dispose of their foundries. This semiconductor fabless model was a TSMC idea, predicated of course on a non-compete model with its fabless customers.
There is no point in League 2 UK going head to head with the premiership - US, EU and China. So it does make more sense to target new ventures in tech - dynamically self-reprogramming chips, cluster processors and new materials. Spend the money as VC, not in keeping Zombies going or trying to be something we can no longer be.
That said, Brexit was the last 6 nails in the coffin of the UK, its economy, status and trade links. We are now small, poorer and isolated and have to target crumbs from the tables of the bigger blocs.
That may not matter. Rising nationalism is seeing states re-arming for WWIII. Combine that with climate change and there probably won't be a lot left. Perhaps we should stop worrying as our civilisation slides towards a similar endgame to previous ones, but with a lot less left behind. Perhaps we should just enjoy what time remains as best we can.
Trying to outspend other countries is not original and not how to grab minds to design the future. There will always be MORE money every where else. What is needed is to think differently. Make britain better to live than other places.
Stop wasting money on stupid infrastructure transport projects, they only ruin peoples lives by making them captives to longer and longer trips. People dont want to waste 10 - 20 hours a week travelling on a train or bus or car. Make work from home a real option, penalize companies for wasting peoples time travelling, build campuses for computer chips in small towns that are the place you want to holiday with 3 day weeks and geniuses will come there for a better life.
Copying every one else is boring and is not helping anyone, because Britain will always lose the race to the bottom, just look at what China did with manufacturing.
So we can look forward to another decade of Britains gradual demise, in the hands of Westminster hell-bent on non-interventionist free-market competition waved-in by the Thatcher era. We've precious little left, and quite unique as a country in selling off the family silver.
In short, our once-national services and infrastructures aside, no protection for keeping the controlling interest of anything 'British' when our technologies are developed in the UK and then sold off abroad, or dependencies on inward-investment for job creation and resulting foreign ownership of home-grown technologies.
Our government isn't at-all serious about redeveloping the UK economy, but merely to support the creation of tech startups that will eventually be sold off to highest bidders overseas, yielding high returns for investors. A sad twist on disproportionate 'wealth creation'.
The political rhetoric of "Investment in the UK is good for jobs" gets more inane every time I hear it.
GB R.I.P.
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