Semiconductors Manufacturing

Lord Fox Excerpts

Monday 18th September 2023 Lords Chamber

Asked by

[Lord Fox]

To ask His Majesty’s Government what progress they have made towards engagement with the semiconductors manufacturing sector concerning funding to support future manufacturing in the United Kingdom, as set out in the Semiconductor Strategy, published on 19 May.

[The Parliamentary Under-Secretary of State, Department for Science, Innovation and Technology (Viscount Camrose) (Con)]

The national semiconductor strategy sets out the Government’s plan to build on the UK’s strengths to grow our sector, increase our resilience and protect our security. We will also announce plans by the autumn to further support the competitiveness of the semiconductor manufacturing sector, which is critical to the UK tech ecosystem and our national security. We have engaged, and continue to engage extensively, with industry. The Government’s new semiconductor advisory panel met last week to inform our approach.

[Lord Fox (LD)]

I thank the Minister for his Answer. I think the concern lies around the rhetoric that has surrounded the May announcement, which very much focused on research and design while coupling that to resilience. As the Minister knows, good design companies and good research get bought and leave the country, and they do not necessarily contribute to resilience, whereas manufacturing does. As the Minister said, we in this country are home to some very innovative, lower-cost, niche manufacturers, but for those investors to have the confidence to further those companies, a strategy needs to be set out. Can the Minister assure your Lordships’ House that his department is putting maximum pressure on the Chancellor so that, when his Autumn Statement comes out, a proper manufacturing strategy for semiconductors in this country will be forthcoming?

[Viscount Camrose (Con)]

The noble Lord raises, as ever, an interesting point, but to build an advanced silicon fab would, first of all, cost tens of billions of pounds. It would run into not only costs of operation but substantial risks of uncompetitive yields and, as we have seen several times historically, shifts in demand for semiconductors. I remind the House that, although 40% of the value chain of semiconductors is represented by manufacturing, 30% is represented by design. It makes sense that our strategy should build on the country’s strengths, particularly in design.