Case study

Shaping the future of the semiconductor industry

Department for Science, Innovation and Technology (DSIT)

IfM Engage and its partners have led a national study on a crucial aspect of developing our domestic semiconductor sector: the necessary infrastructure for R&D translation and scaling up production. Our findings, which reflect a multitude of perspectives and strong collaboration across the industry, have played a vital role in the founding of the UK Semiconductor Institute, ensuring a robust future for the UK semiconductor industry.

Dr Nicky Athanassopoulou

Head of Solution Development, IfM Engage, University of Cambridge

Impact

Influenced the UK Semiconductor Infrastructure Initiative, leading to the creation of a new independent UK Semiconductor Institute to boost future investment and support the sector’s growth.

Identified critical gaps and capability infrastructure requirements in silicon prototyping, compound semiconductors, advanced packaging and semiconductor design, drawing on insights from over 185 semiconductor organisations and 400 semiconductor experts.

Promoted collaboration, discussion and alignment among government, industry, academia and finance, leading to strategic plans and economic models to enhance the UK semiconductor sector.

Background

Semiconductors are vital components of electronic devices and are widespread in the modern world. They play a vital role in shaping the economy and national security and are present in almost every aspect of our daily lives.

Experts predict that the global semiconductor market will grow annually by 6% to 8% and exceed $1 trillion by 2030. Consumer products, such as laptops or smartphones, are likely to be the primary driver of this growth. However, the recent pandemic and geopolitical tensions have exposed the sector’s fragility, revealing how semiconductor supplies can quickly stall. Maintaining and developing UK expertise and expanding the country’s role in global semiconductor supply chains is crucial.

Although it represents only around 2% of the global semiconductor market, the UK is distinguished by its world-leading expertise in chip design, intellectual property and proficiency in packaging and compound semiconductors, excelling in materials and processes across various applications.

The challenge

In May 2023 the UK Department for Science, Innovation and Technology (DSIT) released a national semiconductor strategy outlining the UK’s 20-year vision to establish a strong foundation in semiconductor technologies. Key aspects of the strategy included plans to build on UK strengths in IP and design, compound semiconductors and R&D, while also focusing on increasing supply chain resilience and protecting national security. Initiatives included the UK Semiconductor Infrastructure Initiative, a pilot incubator programme for start-ups, expanded investment in R&D, talent development through apprenticeships and doctoral training, and support for semiconductor-related education.

The DSIT commissioned IfM Engage and its consortium partners to assess the feasibility of establishing infrastructure to support commercial R&D and strategic coordination functions within the UK semiconductor industry. The goal was to investigate the current provision of semiconductor infrastructure in the UK, the industry’s needs and any gaps in the innovation ecosystem, focusing on how to address them to boost both the industry and the UK economy.

Collaborating with organisations in the UK semiconductor industry, such as the Compound Semiconductor Applications Catapult, the Photonics Leadership Group, Silicon Catalyst UK, Techworks, Semiwise, Imperial College, the University of Leeds and Future Horizons, IfM Engage oversaw a 10-month study to tackle the complex landscape of the industry.

In Ultra Modern Electronic Manufacturing Factory Design Engineer

The approach

The project aim was to gain a deep and holistic understanding of the UK semiconductor industry and its complex challenges.

Led by Dr Nicky Athanassopoulou, Head of Solution Development at IfM Engage, the project adopted a systematic methodology that involved extensive data gathering from various national and international sources, data validation workshops with industry and academia, a comprehensive gap analysis, and a series of open presentations of preliminary findings across major UK semiconductor clusters. Central to the study’s success were its principles of impartiality, transparency, inclusivity, collaboration and a commitment to incorporating multiple perspectives.

The study was organised around five distinct work packages, each focused on essential aspects of semiconductor development, ranging from manufacturing capabilities to strategic coordination frameworks and the econometric analysis of various options.

“What set this study apart,” said Nicky, “was its comprehensive engagement strategy, which involved a wide range of stakeholders, including commercial entities, academic institutions, and government bodies. Over 185 organisations and 400 individuals contributed their insights, ensuring both a diversity of perspectives and identification of the most important requirements across the sector.”

The project began with a refined methodology, carefully crafted surveys and strategic planning to ensure comprehensive data collection. In May 2023 the first survey was launched to capture user needs, with invitations sent to over 180 UK organisations, marking the start of an extensive information-gathering effort.

Building on this foundation, a second survey in June 2023 focused on mapping the UK’s existing semiconductor infrastructure. This phase targeted over 40 organisations and encouraged broad participation, highlighting capabilities within universities. This data was supplemented with reviews and analyses of a variety of market research and numerous industry and other national and international reports.

To structure and validate these findings, the project leveraged S-Plan Strategic Roadmapping, a proven method developed by the Institute for Manufacturing (IfM) over 25 years. Through a series of workshops, the team analysed identified needs and capabilities, validated market gaps and failures, and laid the groundwork for targeted interventions to strengthen the sector.

In September 2023 the project team visited the six major UK semiconductor clusters: Northern Ireland, Scotland, the North East, Bristol, South Wales and Cambridge. These visits led to in-depth discussions on intervention scenarios and stakeholder preferences. In October 2023 we consulted additional major UK end users, exploring potential support for the infrastructure initiative, which resulted in prioritising intervention scenarios.

Initial findings and recommendations were brought together in a detailed report and shared with the DSIT to guide government analysis, decisions and future actions.

The study:

Identified the benefits and feasibility of developing different capabilities, including understanding the industry needs and user base, what is required to meet those needs, and options for institutional models that could deliver these requirements.
Recommended options to set up a new national institute to coordinate the UK semiconductor sector, support R&D priorities and provide access to infrastructure to boost commercial innovation in areas where the UK has, or could have, strategic advantage, such as CMOS post-processing, chip design, compound semiconductors and next-generation packaging technologies. This included investigating the economic and financial case, options for sustainable financing, estimated set-up and running costs, and potential benefits to the UK, such as the impact on GDP and employment.

Impact

By identifying the benefits and feasibility of the required capabilities, the study offered a clear understanding of industry needs and potential coordination models. The study yielded important insights and recommendations for the UK Semiconductor Infrastructure Initiative and led to the decision to create a new independent UK Semiconductor Institute.

Key impact outcomes:

– The decision to create a new independent UK Semiconductor Institute. Following a key recommendation from the study, the new institute, announced in June 2024, will spearhead efforts to grow the semiconductor sector as part of the government’s £1 billion strategy. Operating independently from the government, it will amplify the industry’s voice and serve as a central hub to attract investors and boost foreign investment in British semiconductor companies.

– Collaborative approach and industry alignment. Through roadshows involving over 80 participants across key UK semiconductor clusters, the study ensured that its recommendations reflected industry needs. IfM Engage promoted collaboration between government, industry, academia and finance, laying the groundwork for a cohesive and strategic plan to grow the UK semiconductor sector.