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.
CEO of Palantir Technologies Alex Karp attends the Pennsylvania Energy and Innovation Summit, at Carnegie Mellon University in Pittsburgh, Pennsylvania, U.S., July 15, 2025.
Nathan Howard | Reuters
It’s been a tough November for Palantir.
Shares of the software analytics provider dropped 16% for their worst month since August 2023 as investors dumped AI stocks due to valuation fears. Meanwhile, famed investor Michael Burry doubled down on the artificial intelligence trade and bet against the company.
Palantir started November off on a high note.
The Denver-based company topped Wall Street’s third-quarter earnings and revenue expectations. Palantir also posted its second-straight $1 billion revenue quarter, but high valuation concerns contributed to a post-print selloff.
In a note to clients, Jefferies analysts called Palantir’s valuation “extreme” and argued investors would find better risk-reward in AI names such as Microsoft and Snowflake. Analysts at RBC Capital Markets raised concerns about the company’s “increasingly concentrated growth profile,” while Deutsche Bank called the valuation “very difficult to wrap our heads around.”
Adding fuel to the post-earnings selloff was the revelation that Burry is betting against Palantir and AI chipmaker Nvidia. Burry, who is widely known for predicting the housing crisis that occurred in 2008 and the portrayal of him in the film “The Big Short,” later accused hyperscalers of artificially boosting earnings.
Palantir CEO Alex Karp vocally hit the front lines, appearing twice in one week on CNBC, where he accused Burry of “market manipulation” and called the investor’s actions “egregious.”
“The idea that chips and ontology is what you want to short is bats— crazy,” Karp told CNBC’s “Squawk Box.”
Despite the vicious selloff, Palantir has notched some deal wins this month. That included a multiyear contract with consulting firm PwC to speed up AI adoption in the U.K. and a deal with aircraft engine maintenance company FTAI.
But those announcements did little to shake off valuation worries that have haunted all AI-tied companies in November.
Across the board, investors have viciously ditched the high-priced group, citing fears of stretched valuations and a bubble.
In November, Nvidia pulled back more than 12%, while Microsoft and Amazon dropped about 5% each. Quantum computing names such as Rigetti Computing and D-Wave Quantum have shed more than a third of their value.
Apple and Alphabet were the only Magnificent 7 stocks to end the month with gains.
Sill, questions linger over Palantir’s valuation, and those worries aren’t a new concern.
Even after its steep price drop, the company’s stock trades at 233 times forward earnings. By comparison, Nvidia and Alphabet traded at about 38 times and 30 times, respectively, at Friday’s close.
Karp, who has long defended the company, didn’t miss an opportunity to clap back at his critics, arguing in a letter to shareholders that the company is making it feasible for everyday investors to attain rates of return once “limited to the most successful venture capitalists in Palo Alto.”
“Please turn on the conventional television and see how unhappy those that didn’t invest in us are,” Karp said during an earnings call. “Enjoy, get some popcorn. They’re crying. We are every day making this company better, and we’re doing it for this nation, for allied countries.”
Palantir declined to comment for this story.
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