Why UK To Form A New Semiconductor Partnership With Japan

Published  May 18, 2023   0
S Staff
UK-Semiconductor Industry

Ahead of the G7 summit in Hiroshima, Sunak is going to announce the new semiconductor strategies, and the partnership details with Japan

A new semiconductor partnership will be proclaimed by Britain’s new Prime Minister Rishi Sunak with the Japanese government. As per media reports, the new partnership will be announced upon the PM’s visit in Tokyo as the region is now undertaking efforts to boost semiconductor industry and decrease geopolitical tensions by expanding its semiconductor supply chain. 

According to a report of The Financial Times, the announcement has been made by the PM after going through Britain’s new semiconductor strategy, which is likely to highlight the challenges of the UK’s chip industry from depending too much on a couple of chip supplier nations including Taiwan. As per the report, PM Sunak is likely to mention that the semiconductor partnership with Japan will consist of “ambitious R&D co-operation and skills exchange”, developing each nation's in-house industrial sectors, and strengthening the supply chain flexibility. 

The point to be noted is that that partnership is a part of the Hiroshima pact between the two nations that is expected to bring solid economy, technological, security, and energy cooperation. Ahead of the G7 summit in Hiroshima, Sunak is going to announce the new semiconductor strategies, and the partnership details with Japan. 

In fact, Britain is also geared up to announce its new investment plan to boost the semiconductor industry. The Financial Times report added that investment will be around £1bn, which is quite lower than the USA’s CHIPS act of $52 billion. On the other hand, the EU has also unleashed its own ‘European Chips Act’ with €43bn of state aid. 

In an exclusive interaction with the Financial Times, Scott White, co-founder of British group Pragmatic Semiconductor said, "We can comfortably be profitable without incentives but if everyone is offering them elsewhere, that makes the cost of production higher here." White earlier told that his company would opt for public listing in the US if the British government does not take efforts to make the region fiscally attractive to grow the firm. 

Citing security reasons, last year, the British government did not permit the acquisition of Newport Wafer Fab by Nexperia, which is a Chinese owned firm. Experts added that at this moment, Britain is not in a position to meet all its chip requirements in-house and therefore, the country must strengthen its efforts in imperative areas such as compound semiconductors, R&D, and advanced packaging.