British Government Contributes $44 Million Towards Europe’s $1.4 Billion Investment in Semiconductor Industry

The UK has exited the European Union, but semiconductor development is emerging as one of the areas where it hopes to partner for better economies of scale — and much-needed funding. The UK itself said it would put up a more modest £35 million ($44 million) in funding for UK efforts over the next few years as part of that. The Chips Joint Undertaking, for example, has an overall budget of about €11 billion from both public and private contributions. In December 2023, Pragmatic Semiconductor, another Cambridge-based chip company, raised $231 million at a $500 million valuation. “We are very happy to welcome the UK to the Chips Joint Undertaking as a participating state,” said Jari Kinaret, Chips JU Executive Director, in a statement.

The United Kingdom recently left the European Union, but it is still seeking partnerships to improve economies of scale and receive much-needed funding. In a new development, the UK has announced its participation in the EU’s “Chips Joint Undertaking” as a “participating state.” This partnership will provide organizations in the UK with access to a pool of €1.3 billion (approximately $1.4 billion) for research and development in the semiconductor industry. Additionally, the UK government has committed to contributing £35 million ($44 million) over the next several years to support UK efforts.

The UK government is pleased to join the Chips Joint Undertaking and support UK organizations in accessing €1.3 billion for semiconductor research and development. This partnership will help propel UK innovation in this crucial industry.

Initially, £5 million will be provided to assist UK organizations in applying for funding. The remaining £30 million will be available for further research between 2025 and 2027.

Chips are a vital component in the development of technology, whether for advancements in artificial intelligence, consumer electronics, or automotive technology. With the current fragmented state of the semiconductor industry, the UK government estimates that there are tens of thousands of eligible UK companies who could benefit from this funding. The average grant amount is £450,000.

The deadline for grant applications is May 14th, making now the time for interested organizations to apply. This partnership highlights the UK’s recognition that, post-Brexit, it cannot move forward in the technology sector alone. It follows similar collaborations with countries such as Korea for data sharing, Canada for science and innovation, and the US for tech and data agreements.

Europe has a substantial budget for research and development, but it can be difficult to navigate. For example, the Chips Joint Undertaking has a total budget of around €11 billion, sourced from public and private contributions. It was created by the European Chips Act in 2023 to reduce the region’s reliance on semiconductor imports and address geopolitical tensions that could impact the supply chain.

The R&D segment of the Chips Joint Undertaking falls under the larger Horizon Europe program, with a budget of €95.5 billion for research and development across various sectors. The UK joined Horizon Europe separately last year, with companies like Nova Innovation and “The Floow” already receiving grants for projects in tidal energy and road safety technology respectively.

Saqib Bhatti, the UK’s Technology Minister, announced the new partnership at a semiconductor conference in London on Wednesday. He spoke to TechCrunch, emphasizing the benefits for UK organizations in terms of funding and cutting-edge research.

Our contribution to the Chips Joint Undertaking will be cutting-edge research. The UK brings a wealth of talent and experience to the table, and we are very much seen as an equal partner in this endeavor.

The UK has been a significant player in cutting-edge chip research, but like other technology hardware markets, it has been dominated by a small number of companies, damaging the overall ecosystem. Arm, a major chip reference design company based in Cambridge, recently had a successful IPO following the collapse of a proposed sale to Nvidia due to antitrust concerns (although Nvidia has since acquired a stake in the company).

Graphcore, a promising startup from Bristol positioning itself as a major competitor, is now reportedly seeking a buyer at a fraction of its original multi-billion-dollar valuation.

However, there are still exciting smaller players in the UK market. In December 2023, Pragmatic Semiconductor, another Cambridge-based company, raised $231 million with a valuation of $500 million. The UK government was one of the major investors in this round.

The Chips Joint Undertaking is thrilled to welcome the UK as a participating state. We look forward to collaborating with UK partners to advance the European microelectronics industry, contribute to scientific excellence, and maintain leadership in semiconductor technology and related fields.

With these new partnerships and investments, the UK is confident in its ability to continue competing in the global semiconductor race and drive innovation in this crucial industry for years to come.

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Dylan Williams

Dylan Williams is a multimedia storyteller with a background in video production and graphic design. He has a knack for finding and sharing unique and visually striking stories from around the world.

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