Converging technology to scale up the UK’s semiconductor sector
In an increasingly digital world, semiconductors underpin almost every aspect of our lives, from how we work and travel to how we learn, communicate, and stay healthy.
As we adopt technologies like autonomous vehicles, virtual reality, artificial intelligence (AI), and quantum computing, they will no longer operate in isolation. Instead, they will converge, working together to unlock new ideas, capabilities, and innovations.
Semiconductors will act as fundamental foundations for all these technologies. Without advances in semiconductor devices, the growth in tech sector would not be possible. Semiconductor devices enable innovation across multiple applications.
The growth of AI: semiconductors enabling innovation in action
AI offers a clear example of convergence. In the past, AI algorithms were limited by the capabilities of general-purpose hardware. As models have become more complex and data-intensive, they now require specialised chips and infrastructure to handle computing power, data processing, and connectivity demands. As the market evolves, we can expect further specialisation in semiconductor architectures. For example, we will see different AI architectures optimised for training, inference, and edge AI.
The global AI market is projected to reach over $1.5 trillion by 2030, while markets for servers, data centres, and storage are expected to grow to $361 billion. Key areas of innovation include hardware, IoT edge devices, quantum computing, and photonic integrated circuits.
Recent developments show the UK is gaining traction. Canadian quantum computing firm Photonic recently announced it will expand its R&D presence here, and Nvidia, a global leader in AI chips, is investing in an AI lab at the University of Bristol.
Bristol is also home to Isambard, the UK’s most powerful supercomputer, soon to be linked to an even more powerful system in Edinburgh, backed by a £750 million government investment.
With over 500 data centres, the UK ranks third globally, demonstrating that we already have a strong base to support AI growth. The government has also allocated £2 billion for AI in its Spending Review. But to attract more investment and position the UK as a leader in convergent technologies, we must take further action, especially to meet the ambitions set out in the AI Action Plan.
Supporting start-ups and SMEs across the UK
Start-ups and SMEs are the lifeblood of the UK’s tech ecosystem. Of the UK’s 623 semiconductor companies, 92% are SMEs. These are high-potential businesses often behind breakthrough innovations long before they reach the mainstream.
However, early-stage companies face significant barriers: high development costs, limited access to specialist facilities, and difficulty securing funding and scaling. This shouldn’t be the case, especially as the UK was recently ranked by PwC as the second most attractive country for global investment.
We must improve access to capital, shared R&D infrastructure, innovation grants, and procurement opportunities both domestically and internationally.
CSA Catapult helps address these barriers by providing open access to cutting-edge equipment and deep technical expertise. Our data shows SMEs we support secure twice as much private investment and three times as much public funding as those we don’t work with. This shows the impact targeted support can have.
Collaboration through global partnerships
No country can go it alone in the semiconductor sector. The supply chain is complex, global, and capital-intensive. That’s why international partnerships are essential, enabling the UK to access critical knowledge, infrastructure, and markets while focusing on our strengths in design, research, and innovation.
It’s encouraging to see large multinationals investing in the UK and the Government securing strategic partnerships with countries like Canada and Japan, as well as aligning more closely with Europe through the EU Chips Joint Undertaking.
CSA Catapult is building on this momentum. We recently began an R&D programme with SMD Semiconductor, a leading Malaysian firm that has established an Innovation Hub at our Newport facility. We’ve also signed agreements with partners in Canada and Taiwan, expanding our global footprint and collaborative reach.
The UK must continue to act as a trusted and active player in the international tech community, building partnerships that are both strategic and innovative.
Strengthening the sector for the long term
The UK’s National Semiconductor Strategy sets out a ten-year vision to grow the domestic sector and underscores the importance of semiconductors to our economic resilience, national security, and future growth.
The strategy focuses on three key areas:
Strengthening the UK’s semiconductor design sector
Ensuring access to reliable infrastructure
Growing and protecting the talent pipeline
How we turn this strategy into action will be critical to delivering sustainable economic growth.
It’s encouraging to see the government making progress on the strategy and establishing a new UK Semiconductor Centre (UKSC).
The UKSC will help unite our industry and will make it easier for semiconductor businesses to scale, secure investment and find the skills they need to grow their firms.
It will also be a front door for international collaboration - offering a single point of contact for global firms and governments to engage with the UK semiconductor sector and form new partnerships and help strengthen the UK’s role in global supply chains.
CSA Catapult has been tasked with helping to mobilise the UKSC and shaping its priorities and we look forward to this challenge.
A future worth investing in
Semiconductors aren’t just economic levers. They are tools for building national resilience, improving security, and delivering long-term prosperity. If we want to lead in next-generation industries like AI, we must also lead in the hardware and fundamental technologies that will power them.
The UK has the foundations: world-class research, strong design capabilities, a vibrant start-up scene, and growing international partnerships. Now is the time for action.
techUK – Unleashing UK Tech and Innovation
The UK is home to emerging technologies that have the power to revolutionise entire industries. From quantum to semiconductors; from gaming to the New Space Economy, they all have the unique opportunity to help prepare for what comes next.
techUK members lead the development of these technologies. Together we are working with Government and other stakeholders to address tech innovation priorities and build an innovation ecosystem that will benefit people, society, economy and the planet - and unleash the UK as a global leader in tech and innovation.
For more information, or to get in touch, please visit our Innovation Hub and click ‘contact us’.
