According to the British government’s science and technology advisory body, the country could become a leader in the design of AI chips if it had the right skills and investment in place.
According to a brief report by the Council for Science and Technology, the UK’s “niche and highly specialised chip industry” will never be able compete head-tohead with global giants like the US and Taiwan. The country must channel investment in areas where it can excel. The CST believes that the best strategy is to focus on designing chips rather than manufacturing them. As it expects AI products to be the fastest-growing part of the global semiconductor industry in the next decade, Britain should concentrate its efforts here. Ironically, Arm, a chip design company that was born in Britain, but sold off by the government at the timenow sees AI, as its future money maker. The report states: “with Arm’s ownership by Softbank, its listing on Nasdaq and with a majority of its employees outside the UK, it feels to some like a lost opportunity.”
In its recommendations, CST suggests the government set a “feasible objective” goal of having new or existing Brit firms launch 50 AI chips over the next five year period, to focus minds on the task at hand.
The CST states that in order to achieve this goal, it is necessary to invest in skills and hire more chip design engineers. The report also calls for agencies like the Department for Science, Innovation and Technology to set clear strategic goals on semiconductors, and for government to coordinate investments throughout the entire process, which includes providing timely access production testing facilities. Six separate recommendations are made in the report.
The CST, in many ways, is just a reiteration of some of the conclusions from the National Semiconductor Strategie that was published by the previous government. The UK should invest in areas like chip design, intellectual property (IP), R&D and compound semiconductors, instead of subsidizing massive chip manufacturing facilities as the US and EU do. The report and its recommendations were based on the AI Opportunities Action Planof the current administration, announced in January. This plan sees AI as a way to drive growth and productivity in the future. The CST notes that the official plan is silent about the use of UK-designed AI chips. This could lead to the country having datacenters filled with GPUs made by a single dominant foreign provider, which is problematic. The report asserts
“History shows that a vendor with 90 percent market share and 75 percent gross margin is not sustainable. When the market diversifies, which it inevitably will, there is an opportunity for the UK to have a stake,” . It also points out that having home-grown AI chip would help secure Britain’s supply chain in an uncertain time of tariffs and restrictions on exports. The report estimates that the UK chip industry will need approximately 7,000 new designers in the next five-year period. This number could rise to 12,000, if the plan of delivering 50 new AI chips is to be realized.
The UK should train more designers in its universities to increase supply. However, most academic institutions do not offer courses on electronics and chip design. The report recommends a national curriculum with access to chip-design services in collaboration with companies like IMEC and Muse Semiconductors. These companies give students experience with 16nm or 7nm processes through TSMC’s FinFET University Program.
Optoelectronics should be a key area of focus, as high-performance AI system are increasingly using optical interfaces internally and externally. CST says DSIT and Department for Education should expand investment in training and skill for optical, primarily through the Optoelectronics Research Centre at the University of Southampton. TechUK demands that Britain’s chip strategy be sharpened
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