Question to the Department for Science, Innovation & Technology:

To ask the Secretary of State for Science, Innovation and Technology, with reference to the National Semiconductor Strategy, published 19 May 2023, what steps her Department is taking to help ensure semiconductor manufacturing is distributed equitably across the UK.

The UK is home to significant semiconductor companies across sub-sectors, including in key parts of the supply chain such as wafer production and manufacturing tools. There are currently around 25 semiconductor manufacturing sites in the UK, distributed throughout England, Wales, Scotland and Northern Ireland. These capabilities vary in output and complexity.

The UK is also home to the Compound Semiconductor Applications Catapult. The Catapult is a very strong example of government, industry and academia working together and it has now initiated over £160 million of projects, working with over 100 companies across the UK developing advanced electronic products. The Catapult has built an impressive record of generating industrial collaborations to commercialise its research, including through compound semiconductor manufacturing. The Catapult will expand its operations in 2023, opening UK facilities to support regional clusters developing satellite communications and future telecom networks.

On Friday 19 May the Government announced its new National Semiconductor Strategy. Through the Strategy we announced an investment of up to £200 million over the years 2023-25 and up to £1 billion in the next decade.

This builds upon significant support for high-tech enterprise including a £500 million per year package of support for R&D intensive businesses through changes to R&D tax credits announced in the Spring Budget and through ‘full expensing’ for companies incurring qualifying expenditure on the provision of new plant and machinery.

In addition, this government has already provided funding for both research and innovation in semiconductor technology. Through Innovate UK, we have distributed £214 million of grants over the last 10 years directly to SMEs in the semiconductor sector.

However, we want to do more to support businesses big and small, and in every part of the sector, to pursue opportunities within the sector that build on our proud history of innovation and strong foundations in this vital technology.

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.