Britain's Semiconductor Plan Goes AWOL as US and EU Splash Billions

As nations around the world scramble to secure crucial semiconductor supply chains over fears about relations with China, the U.K. is falling behind. From a report: The COVID-19 pandemic exposed the world's heavy reliance on Taiwan and China for the most advanced chips, which power everything from iPhones to advanced weapons. For the past two years, and amid mounting fears China could kick off a new global security crisis by invading Taiwan, Britain's government has been readying a plan to diversify supply chains for key components and boost domestic production. Yet according to people close to the strategy, the U.K.'s still-unseen plan -- which missed its publication deadline last fall -- has suffered from internal disconnect and government disarray, setting the country behind its global allies in a crucial race to become more self-reliant. A lack of experience and joined-up policy-making in Whitehall, a period of intense political upheaval in Downing Street, and new U.S. controls on the export of advanced chips to China, have collectively stymied the U.K.'s efforts to develop its own coherent plan. The way the strategy has been developed so far "is a mistake," said a former senior Downing Street official. During the pandemic, demand for semiconductors outstripped supply as consumers flocked to sort their home working setups. That led to major chip shortages -- soon compounded by China's tough "zero-COVID" policy. Since a semiconductor fabrication plant is so technologically complex -- a single laser in a chip lithography system of German firm Trumpf has 457,000 component parts -- concentrating manufacturing in a few companies helped the industry innovate in the past. But everything changed when COVID-19 struck.

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