Report recommends that the UK become a leader in chip design
The British government's advisory body on science and technology thinks the country could be a world leader in designing AI chips, if it could just get the right investment and skills in place.
A brief report from the Council for Science and Technology (CST) notes that the UK has a "niche and highly specialised chip industry" that is never going to be able to compete head-to-head with global big hitters like the US, Taiwan, and Korea, so the country needs to channel investment into areas where it can lead.
The CST concludes that designing rather than manufacturing chips is the best policy, and as it expects AI-related products to be the fastest growing part of the worldwide semiconductor industry over the next decade, this is where Britain should focus its efforts.
Ironically, chip design firm Arm, which was born in Britain but allowed by the government of the day to be sold off, also now sees AI as its future money spinner. The report states that: "with Arm's ownership by Softbank, its listing on Nasdaq and with a majority of its employees outside the UK, it feels to some like a lost opportunity."
As part of its recommendations, the CST suggests that the government should set the "feasible objective" of seeing new or existing Brit chip firms launch 50 AI chip products over the next five years, in order to concentrate minds on the job in hand.
According to the CST, achieving this goal requires investment in skills to deliver more chip design engineers. It also demands that agencies such as the Department for Science, Innovation and Technology (DSIT) set clear strategic objectives on semiconductors, and for the government to coordinate investment through the entire process, including providing timely access to production testing facilities. These are laid out in six separate recommendations in the report.
In many respects, the CST is simply echoing some of the conclusions of the National Semiconductor Strategy published under the previous government. This identified areas such as chip design and intellectual property (IP), R&D, and compound semiconductors as the UK's strengths to invest in, rather than subsidizing the building of massive chip manufacturing facilities, as the US and EU are doing.
However, the report and its recommendations have been drawn up in light of the current administration's AI Opportunities Action Plan, revealed in January, which sees AI as the way to drive future growth and productivity.
That official plan is silent on the topic of using UK-designed chips for AI, the CST notes, which risks the country ending up with datacenters in the proposed "AI Growth Zones" being filled with GPUs from a single dominant foreign supplier, which it says is problematic for many reasons.
"History shows that a vendor with 90 percent market share and 75 percent gross margin is not sustainable. When the market diversifies, which it inevitably will, there is an opportunity for the UK to have a stake," the report claims.
Having home-grown AI chips would also help secure Britain's hardware supply chain for both commercial and military applications, in an uncertain era of tariffs and export restrictions, it points out.
This is all very well, but the UK chip industry already needs approximately 7,000 new chip designers over the next five years, the report estimates, and this figure rises to 12,000 if the plan to deliver 50 new AI chip products stands a chance of happening.
To increase supply, the UK should train more chip designers at its universities, but most academic institutions no longer offer electronics and chip design courses. The report recommends a nationally curated curriculum with access to chip design services in collaboration with companies such as IMEC and Muse Semiconductors, which give students experience with 16nm and 7nm processes via TSMC's FinFET University Program.
A key area of focus should be optoelectronics, as high-performance AI systems are increasingly using optical interconnects both internally and externally. CST says that DSIT and the Department for Education should look to expand investment in training and skills for optical, in particular through the Optoelectronics Research Centre (ORC) at the University of Southampton.
CST also wants to see DSIT and the UK Ministry of Defence work more closely on investment, as it says there are significant dual-use opportunities that the National Security Strategic Investment Fund (NSSIF) could finance.
But investment has long been the Achilles heel of UK industry, and CST acknowledges that the government will have to coordinate the flow of pounds to support the growth of any UK AI chip industry, and this is where the plans are likely to fall apart.
Some in UK industry expressed optimism at the CST report, with Phillip Kaye of datacenter biz Vespertec saying that this would be the place to start to build the UK's AI credentials.
"British-led semiconductor research has long been among the best in the world, so it makes sense for us to build on this existing advantage. Strong investment in the sector in the last 18 months has been encouraging, and growing our capacity in this area as the report outlines will benefit our digital infrastructure industries and help insulate us from any potential shocks to global supply chains," he said.
However, it's worth recalling what semiconductor analyst Richard Gordon once told The Register about the UK government's sudden enthusiasm for chips.
"It's like they've just discovered that semiconductors are important," he said, adding that "successive governments have failed here, and they haven't learned anything over the last 30 years or so." ®
UK advisory body wants investment in local AI chips
: Report recommends that the UK become a leader in chip design
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