British semiconductor bosses threaten to move overseas as U.S. and EU splurge on chips
Florence Lo | Reuters
LONDON — The U.K.’s semiconductor industry is crying out for financial support from the government, with insiders warning the country risks losing its microchip firms to the U.S. and other countries if it doesn’t act soon.
Prime Minister Rishi Sunak’s government is yet to announce a strategy outlining U.K. efforts to support the chip industry. And semiconductor bosses in the country are growing frustrated.
Pragmatic Semiconductor, a Cambridge, England-based startup that produces nonsilicon chips, warned it may be forced to relocate overseas if the government doesn’t issue a plan for the industry soon.
“It has to make economic sense for companies like ours to continue to operate and manufacture here, and if there are greater potential economic benefits and governmental support packages abroad, then relocation is the only sensible business decision,” Scott White, CEO of Pragmatic Semiconductor, told CNBC.
Britain is an understated player in the global chip market, specializing in design, intellectual property, research and fabrication of compound semiconductors.
It is also home to one of the most coveted semiconductor-related assets in the form of chip designer Arm. Based in Cambridge, Arm-licensed chips are used in roughly 95% of the world’s smartphones.
Semiconductors, and the mainly East Asia-based supply chain behind them, have become a thorny issue for world governments after a global shortage led to supply problems for major automakers and electronics manufacturers.
The Covid-19 pandemic exposed an overreliance on manufacturers from Taiwan and China for semiconductor components. That dependency has become fraught with tensions between China and Taiwan on the rise.
TSMC, the Taiwanese semiconductor giant, is by far the largest producer of microchips. Its chipmaking prowess is the envy of many developed Western nations, which are taking measures to boost domestic production of chips.
IQE, a microchip firm in the semiconductor “cluster” in Newport, Wales, has also warned it may be forced to relocate to the U.S. or EU if the government does not act in the next six months.
“We would love to stay in the UK and have committed to grow in the UK … but we also have to do what shareholders want and go where the money is,” Americo Lemos, IQE’s CEO, told The Times newspaper.
A government spokesperson told CNBC: “We are committed to supporting the UK’s vitally important semiconductor industry. Our strategy will grow the sector further and make sure we have a resilient supply chain. The strategy will be published as soon as possible.”
In the U.S., President Joe Biden signed into law the CHIPS and Science Act, a $280 billion package that includes $52 billion of funding to boost domestic semiconductor manufacturing.
The EU, meanwhile, has earmarked 43 billion euros ($45.9 billion) for Europe’s semiconductor industry with the aim of producing 20% of the world’s semiconductors by 2030.
China, too, has been forced to revamp its chip strategy after facing strict trade sanctions from the U.S. In December, the country was said to be preparing a more than 1 trillion yuan ($147 billion) package for its chip industry, according to Reuters.
‘Act of national self harm’
U.K. tech industry executives have said the lack of a similar strategy from the government is hurting the country’s competitiveness.
The U.K. likely won’t have the kind of financial firepower to match those bold spending packages, they say. However, they’re hopeful the country will commit to investment in the several millions, tax incentives and an easier immigration process for high-skilled workers.
“Chasing to catch up is not within the spending power of the U.K., not even remotely,” Simon Thomas, CEO of Paragraf, a British firm developing and producing graphene-based electronics, told CNBC.
On Feb. 3, lawmakers on the Business, Energy and Industrial Strategy (BEIS) committee called for government action on the semiconductor industry, labeling the lack of a coherent microchip strategy an “act of national self harm.”
The government’s BEIS agency was on Tuesday disbanded and replaced under a shuffle from Sunak.
The business and industrial strategy portfolio now falls under the remit of Kemi Badenoch, minister for a newly formed Department for Business and Trade, while a Department for Science, Innovation and Technology is being headed up by Michelle Donelan.
Sunak became Britain’s third prime minister of the year in October, inheriting a gloomy economic backdrop from his predecessor Liz Truss.
He is under pressure from chip bosses to outline a strategy for the industry — and fast.
Russ Shaw, founder of Tech London Advocates, said the government needed to “step up.” London has been “inordinately distracted by chaos.”
A U.K. semiconductor strategy was expected to come out last year. But it has faced a series of delays due to political instability. The government previously suggested establishing a national institution, among other initiatives, to boost its semiconductor industry.
“The rumors I’ve heard is [it may arrive] any day now,” Chris Ballance, co-founder of U.K. quantum computing startup Oxford Ionics, told CNBC. However, he added the process had been “going on for the last four or five months.”
Correction: Russ Shaw is founder of Tech London Advocates. An earlier version misstated the name of advocacy group.
A next generation iPhone 17 is held during an Apple special event at Apple headquarters on Sept. 9, 2025 in Cupertino, California.
Justin Sullivan | Getty Images
Apple shares rose nearly 3% on Monday as a new report showed iPhone 17 sales off to a strong start in the U.S. and China.
The iPhone 17 series, which dropped in September, has outsold the iPhone 16 series by 14% in the U.S. and China within its first 10 days of availability, according to data from Counterpoint research.
“The base model iPhone 17 is very compelling to consumers, offering great value for money,” Counterpoint senior analyst Mengmeng Zhang said in the report. “A better chip, improved display, higher base storage, selfie camera upgrade – all for the same price as last year’s iPhone 16. Buying this device is a no brainer, especially when you throw channel discounts and coupons into the mix.”
Bloomberg was first to report the sales numbers.
The company is positioned to rally with demand for the latest iPhone generation exceeding expectations, according to Loop Capital.
The investment bank upgraded Apple from hold to buy, raising its price target to $315 per share from $226.
“While [Wall] Street is baking in some degree of outperformance from AAPL’s iPhone 17 family of products, we believe there remains material upside to Street expectations through CY2027,” Loop Capital’s Ananda Baruah said in a note to clients on Monday.
Apple 5-day stock chart.
Technology
Transportation Secretary Duffy says Musk’s SpaceX is behind on moon trip and he will reopen contracts
Transportation Secretary Sean Duffy said Monday that Elon Musk‘s SpaceX is falling “behind” the U.S. timeline to return to the moon with Artemis and he will open the contract to other companies.
“We’re not going to wait for one company,” Duffy, who is currently the acting NASA administrator, told CNBC’s “Squawk Box” on Monday. “We’re going to push this forward and win the second space race against the Chinese. Get back to the moon, set up a camp, a base.”
SpaceX did not immediately return a request for comment.
SpaceX is among the various contractors participating in NASA’s Artemis mission, which aims to establish the “first long-term presence on the Moon” and prepare for missions to Mars. Jeff Bezos’ Blue Origin, Boeing, Lockheed Martin and Northrop Grumman are also supporting the mission.
SpaceX won a contract in 2021 to provide a lunar landing system for astronauts on the Artemis III mission.
In December, NASA pushed back the next Artemis missions, with the next launch to send astronauts around the moon and back delayed until April 2026 and the trip to land two astronauts on the south polar region of the Moon moved to 2027.
Duffy said Monday that he thinks the April launch can happen in early February and the agency is looking to get “back to the moon in 2028” with two potential companies. Duffy highlighted Blue Origin as a potential competitor that could take over.
“They push their timelines out, and we’re in a race against China,” Duffy said of SpaceX. “The president and I want to get to the moon in this president’s term, so I’m going to open up the contracts.”
Rocket tests for SpaceX and the space sector haven’t always been smooth sailing.
The company launched its eleventh Starship test rocket earlier this month following a string of stumbling blocks and explosions. Firefly Aerospace‘s Alpha rocket exploded last month, shortly after the Federal Aviation Administration cleared it to continue testing.
The ongoing government shutdown could put a dent in plans to reopen contracts. CNBC’s request for comment on the contracting process was answered with an automatic reply that the agency was closed.
CNBC previously reported that NASA employees working on the Artemis missions with contractors such as SpaceX and Blue Origin would continue working during the shutdown.
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