Technology bosses anger as minister’s mayoral ambitions ‘delay semiconductor strategy’

Technology bosses anger as minister’s mayoral ambitions ‘delay semiconductor strategy’

19 Apr    Finance News, News, Technology

Technology bosses accused the government of being “distracted” after the minister who was due to launch the long-delayed semiconductor strategy this week confirmed that he was considering running as mayor of London.

Paul Scully, the minister for tech and the digital economy, was expected to outline the plan for the UK’s microchip industry at the Compound Semiconductor Applications Catapult just outside Newport tomorrow. However, sources said he pulled out on Monday, and then yesterday the Conservative MP for Sutton and Cheam confirmed he was mulling over his potential candidacy.

Dr Simon Thomas, chief executive of Paragraf, a Cambridge-based semiconductor business said, he was dismayed by yet another setback: “I am disappointed and angry with the government and the minister. He is clearly being distracted by his other career plans.”

One source said the cancellation of the ministerial visit was because of confusion over who would replace Michelle Donelan, the science, innovation and technology secretary, who is on maternity leave, and therefore who should make the important announcement.

A technology entrepreneur who declined to be named said this was extraordinary, adding: “It’s not as if her pregnancy is news to anyone. They could have planned this ages ago. The government has trouble factoring in a nine-month gestation?”

The clamour in the technology industry for some kind of roadmap for the sector has been getting louder over the past year. In January, stalwarts such as Hermann Hauser, the founder of Acorn, which spun out the semiconductor giant Arm, and the industry groups TechUK and Global Tech Advocates wrote to the prime minister and warned that a lack of one could spell the end of the UK as a technology leader. They wrote: “Confidence in the government’s ability to address the vital importance of the industry is steadily declining with each month of inaction.”

The UK is lagging behind other parts of the world when it comes to setting out a proposal for backing the key semiconductor industry.

Amid a global shortage in semiconductors, countries are increasingly aware of their dependence on Asian-based supply chains for the manufacturing of these vital components, the bedrock of modern electronics and everything from lasers to green technology. TSMC, of Taiwan, has more than half the global semiconductor foundry market.

The European Union and the United States, through their “chips acts”, are spending tens of billions of euros and dollars to expand their industries and to bring production onshore.

China is also putting billions of dollars into the sector to increase its self-reliance, as relations with the West become increasingly frosty. The US has implemented bans on exports of high-tech chips and manufacturing equipment to Beijing.

A source close to the Department of Science, Innovation and Technology denied that there was a hold-up because of Scully’s mayoral ambitions or queries over Donelan’s maternity cover. Another said that Scully has been a Minister for London for the last three years so could not see why this would suddenly divert his attention from semiconductors.

The government has repeatedly said that the semiconductor strategy will be published “as soon as possible”.

Speaking at the Times’s Tech Summit last month, Donelan said that the UK “was not in a position to enter an arms race with the United States … we know the amount of money that they poured into the Chips Act”. However, she said: “We do have a strategy that will show our thinking and our approach to this from an economic security and national security point of view.”

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