Microchip plan delayed until after election

MINISTERS have delayed a decision on spending hundreds of millions of pounds on a flagship microchip facility until after the election, despite concerns about a lack of action to support the industry.

Semiconductor industry sources said they have been told not to expect progress on an “infrastructure initiative”, a central plank of the Government’s £1bn semiconductor strategy, until the next spending review, which will take place after the election.

The delay has sparked alarm, given the US and Europe are spending billions on boosting domestic manufacturing and supply chains in the increasingly crucial technology. Production is currently concentrated in Asia, a fact that is causing alarm given rising geopolitical tensions in the region.

There are fears that Britain’s semiconductor industry will struggle without concerted Government support.

Draft versions of a report delivered to ministers said that a lack of skilled semiconductor engineers in the UK as well as low salaries threatened to hold back the industry. “The UK is not attractive to international talent” it said.

Ministers commissioned experts to draw up several options for semiconductor manufacturing facilities last year in an attempt to bolster Britain’s manufacturing expertise. An option to spend up to £500m on a fully-fledged facility, focused on advanced chips such as those used in electric cars, was removed from later versions of the report because of concerns it would compete with private companies.

Britain is seen as a frontrunner in this area of semiconductors.

Zachary Spiro, manager at policy consultancy Flint Global, said: “It’s a shame that the sector may now have to wait two years to find out how much of the promised £1bn will be spent, and what on.”

A Government spokesman said: “Our Semiconductor Strategy is working. Backed by £1bn, it takes a targeted approach to growing the British sector and protecting national security by doubling down on our key strengths.”