TechUK, the UK’s technology industry association, has called on the government to provide details on how its semiconductor ambitions will support chip manufacturing in the UK in its upcoming Spring Budget to be announced on Wednesday (6 March).

The National Semiconductor Strategy, which includes £1bn of government investment over the next ten years, was announced by the government in 2023. The strategy aims to boost the UK’s strengths and skills in semiconductor technologies, such as AI and quantum computing.

Following the strategy announcement, the newly formed Department for Science, Innovation and Technology (DSIT) commissioned a study into the economic viability of growing the UK semiconductor sector.

The UK Semiconductor Infrastructure Initiative, which launched in March 2023 and concluded in December, aimed to provide the government with proposals for boosting innovation in the UK’s semiconductor industry.

However, TechUK noted that the government still needs to provide details on how the strategy will help boost semiconductor manufacturing – and this should come in its Spring Budget.

“At the Budget the Chancellor should publicly share the findings and recommendations from the recent UK Semiconductor Infrastructure Initiative Feasibility Study as well as provide an update on how the UK will support semiconductor manufacturing,” TechUK wrote in a recent blog post.

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The semiconductor industry has continued to grow at a fast pace in the UK, with deals peaking in 2023, according to GlobalData’s deal database.

Despite revenue within the semiconductor sector experiencing a slowdown of 9.4% from 2022 to 2023 globally, the total value of semiconductor deals in the UK totalled $75.8bn in 2023, a significant increase over 2022 which saw deals total $44bn.

Semiconductor deals in the UK reached a low in 2019, with just $762m invested in deals.

Despite the global slowdown and decline in revenue throughout 2023, demand for semiconductors has remained extremely high.

GlobalData’s Tech, Media, & Telecom Predictions 2024 report cites NVIDIA's 100% year-on-year revenue growth in the last two reported quarters as evidence of the industry's importance.

The research and analyst company believes the semiconductor industry will return to growth in 2024, as the rollout of new products at the end of the inventory correction drives semiconductor sales through 2024 and beyond.

According to the report, strong demand from endpoint device manufacturers and AI servers will ensure that the AI chips market experiences sustainable growth in 2024. 

The research company also believes that NVIDIA will become less of a dominant force in the AI chip industry in 2024 due to rising market competition.