Feb 03, 2023The semiconductor chip shortage has caused a lot of problems for businesses worldwide. The ongoing crisis began in early 2020, with the demand for integrated circuits exceeding the supply of chips, resulting in dramatic price increases and product shortages in more than 169 industries. This shortage, affecting manufacturers and consumers alike, has noticeably disrupted the markets for computers, household appliances, automobiles, video games, graphics cards and other electronic goods requiring semiconductors to function (see Why Is There an RFID Chip Shortage?, Chipping Away at Supply Chain Issues and How to Navigate Chip Shortages with RFID Deployments).
In the United Kingdom, a group of Ministers from Parliament's Business, Energy and Industrial Strategy (BEIS) Committee have been putting pressure on the British government to establish a clear strategy to protect and foster the U.K. semiconductor industry. Today, the BEIS released a statement on Parliament's Committees website calling on the government to take action on the crisis, citing the lack of a coherent microchip strategy as an "act of national self-harm" (see Further Semiconductors Strategy Delay 'Act of National Self-Harm,' Says Committee Chair).
The BEIS had provided a report to the British government in November 2022, but the publication of that document was delayed, its recommendations not yet acted upon. The committee is criticizing this delay, expressing disappointment that its recommendations have not been fully addressed. "The November report's key recommendations included better cooperation with allies to safeguard supply and to secure inward investment," the BEIS said in a prepared statement. "The committee also cast doubt on whether government support for the industry was sufficient to have any meaningful effect."
Labour MP Darren Jones, the chair of the BEIS Committee, commented in the statement: "Countries across the globe have grasped the importance of securing semiconductor supply chains for their futures, why haven't we? While others race ahead, ploughing billions into setting up fabs or industry support, we're not even at the starting line. Two years in the making but still no strategy. Further delay would be an act of national self-harm. With 40 days until the budget, the strategy must be published urgently so that sufficient funds can be put behind it and used effectively."
During the pandemic, Intel had planned to increase its European output by investing $80 billion on a chip factory in the United Kingdom, which could have gone far toward alleviating the problem for British companies and consumers. But following Brexit—in which Britain opted to leave the European Union and its worldwide political and trading bloc—that plan was scrapped (a chip off the ol' bloc, one might say). Instead, Intel sought a new location for its semiconductor plant in the European Union (see Thanks to Brexit, UK's Chip Factory Loss Will Be Europe's Gain and Intel's €80bn European Chip Plant Investment Plan Not Bound for UK Because Brexit).
Scott White, the CEO of U.K.-based semiconductor firm Pragmatic, provided RFID Journal with his opinion of what the government's strategy should entail. He believes the strategy is likely to be too focused on advanced silicon, and that support must also be provided for non-silicon alternatives. "The British semiconductor industry needs a clear strategy and support from the government that focuses on semiconductor sectors where the U.K. can grow sustainably," he says, "but critically this must include manufacturing."
As White explains, "Whilst the development of manufacturing processes for silicon chips may be valuable, it is essential that support is also provided for alternative semiconductor materials where the U.K. has a strong track record of innovation and competitive differentiation." Domestic manufacturing of non-silicon chips, he says, such as flexible thin film semiconductors, is "more cost-effective and economically scalable than pouring billions into building new silicon fabs." He notes, "These more sustainable alternatives to silicon can help solve issues around supply chain security, as well as fueling industry growth in new application areas such as healthcare, smart packaging and the circular economy."
White believes the British government needs to demonstrate its commitment to semiconductor companies in that country through "significant public sector procurement or policy initiatives that create meaningful home-grown revenue opportunities, and appropriate incentives for capital expenditure on high-value manufacturing to level the international playing field." This, he maintains, would enable U.K.-based businesses and public organizations like the National Health Service to "reap the benefits of the world-leading technology already on offer here in Britain."
To our readers living, working and doing business in the United Kingdom (and to everyone else as well), I ask this: What's your opinion on the above situation? Has the British government, in not acting quickly enough to address the chip shortage, committed "an act of national self-harm"? And was Brexit a large contributing factor to the U.K.'s continued semiconductor problem? Feel free to chime in with comments below.
Rich Handley has been the managing editor of RFID Journal since 2005. Outside the RFID world, Rich has authored, edited or contributed to numerous books about pop culture. You can contact Rich via email.
