Intel has called on the government to lay out a strategy for the semiconductor industry and not miss out on inward investment.
The giant American chip company is spending £33 billion on semiconductor research and manufacturing in mainland Europe, with support from the European Union, but has no plans for the UK.
Western countries want to reduce their dependence on semiconductors from Asia in order to prevent supply shortages similar to those that occurred during the Pandemic, which caused widespread disruption to manufacturing. The need has become more acute due to the growing tensions between China and Taiwan, a key producer.
Under its Chips Act, the EU has a goal of €45 billion to make 20 per cent of the world's microchips in the bloc by the year 2030. Only 10 per cent of the region comes from the region. As part of its Chips and Science Act, passed in July, the United States is spending more than $50 billion to encourage global manufacturers to invest there.
Britain is conducting two reviews of the sector, which is crucial for the functioning of electronics and infrastructure, but has yet to formulate a plan.
Frans Scheper, Intel's new president in Europe, said: I think it is good that the UK is making inquiries, but it needs to take the next step and make investments. He described semiconductors as the new oil and said investment was needed now to safeguard the future. He said it was about security and supply chains. These factories take years to build and I am worried about protecting our IP in the western world. You can't just say, Yeah, there's a shortage, let's build a factory. They will be vital for the West -- everything will be built on this processing power. Intel's investment plans include €17 billion for a giant new fab or manufacturing plant in the German city of Magdeburg, due to be operational in 2027. There will be money across the supply chain in France, Ireland, Italy, Poland, Belgium and Spain.
If we don't make investments, there will be bigger shortages, according to Scheper. It takes a lot of computer power to make the digital transformation happen. The Department for Digital, Culture, Media and Sport and the Commons business select committee is looking at the strengths and weaknesses of the industry and its supply chain in the UK. Manufacturers are waiting for an official announcement about the future of the sector.
Scheper said that the UK is an important market for Intel -- we have over 1,000 people working there. We don't have plans to build a new facility in the UK. There is nothing to say that we don't want to invest there, but let s be clear: the European Union's support is helping us make these investments. He said that the UK had strong expertise in the design of microchips, mainly clustered around universities, which is very exciting, and there is a lot of capital coming out of London, which is important for growing start-ups. Our focus is on the EU because of the investment.