White House courts British microchip industry
Biden tax cuts threaten to trigger exodus from UK as companies call for credible semiconductor strategy
SOME of Britain’s top microchip companies have held talks with the White House after a $53bn (£44bn) subsidy scheme launched by Joe Biden triggered a scramble to shift operations to the United States.
A delegation of British chip makers travelled to Washington this week as President Biden’s administration opened applications for billions of dollars in federal funding.
The companies involved included IQE, Paragraf and Pragmatic Semiconductor, all vocal critics of Britain’s failure to develop a credible chip strategy.
It comes after Arm, Britain’s biggest microchip company, spurned advances from Rishi Sunak and chose to pursue a blockbuster New York float.
Rene Haas, Arm’s chief executive, confirmed yesterday that it would list on Wall Street, saying the company would remain headquartered in the UK and that it would consider a secondary London listing in future.
The talks in Washington this week were held during a visit that also included government representatives and companies including Graphcore, Salience Labs and Clas-sic.
Members of the delegation met White House and congressional staff, including officials implementing Biden’s Chips and Science Act, a $52.7bn effort to return chip making to the US and reduce dependence on Taiwan.
Scott White, the chief executive of Cambridge-based Pragmatic Semiconductor, said the talks could open doors to applying for US funding that may ultimately lead to operations shifting overseas.
He said: “[The talks were] very much around building the right connections with all of the different groups in the US government that are involved in the Chips Act, and understanding how we progress those discussions with them.
“If we can go anywhere else in the world and get support for the capital investment of installing manufacturing facilities, then it’s relatively speaking far less attractive to do it in the UK.
“If, as we grow, the majority of our manufacturing ends up being in the US or elsewhere, then how do you retain the logic of the UK headquarters?”
Mr White said it was “50-50” whether the company would float in the UK or US when it decides to go public.
Substantial US subsidies have already persuaded electric vehicle company Arrival to move production from the UK to North Carolina. CRH, the world’s largest building materials supplier, is moving its shares from London to New York in anticipation of an American infrastructure boom.
IQE, whose chip technology is used in the iphone’s facial recognition system, has warned that it could leave Britain in the absence of a credible semiconductor strategy. The London-listed company already has facilities in the US.
Tim Pullen, its chief financial officer, said: “They are planning five years ahead and putting those plans into
‘If the majority of our manufacturing ends up in the US, what’s the logic of the UK headquarters?
action. The UK is woefully in danger of being left behind if it does not move fast to put together a meaningful strategy.”
Paragraf, which specialises in graphene semiconductors, has also warned it could leave Britain over government “paralysis”.
Both the US and the EU have committed to tens of billions in chip subsidies, while a proposed UK strategy has been held up amid political turmoil. The Government has said it will publish a semiconductor strategy as soon as possible.
Mr Haas said yesterday that Arm would maintain its Cambridge headquarters. He said the company planned to hire more staff in Britain and would open a new site in Bristol.
A government spokesman defended its efforts to secure more listings in Britain, saying: “The UK is taking forward ambitious reforms to the rules governing its capital markets, building on our continued success as Europe’s leading hub for investment and the second largest globally.”