How can the UK capitalise on the rapidly evolving semiconductor landscape
The pivotal role of semiconductors in driving economic growth has never been more evident. These technologies are foundational to modern life—powering transformative advancements in artificial intelligence (AI), cloud computing, electric vehicles (EVs), advanced connectivity, defence, healthcare, industrial automation, and renewable energy systems. Semiconductors are also essential to enabling quantum technologies, whether in computing, sensing, or Position, Navigation and Timing (PNT).
In response to shifting geopolitical and economic dynamics, governments worldwide are reassessing their semiconductor strategies to secure access to this critical technology and ensure their economies benefit from ongoing innovation. With a dynamic innovation ecosystem, a thriving start-up scene and world-class expertise in photonics, the UK is uniquely positioned to capitalise on the rapidly evolving semiconductor landscape, enabling the UK to be the first to pioneer next-generation chips.
The accompanying diagram illustrates emerging semiconductor trends. Here, blue represents microelectronic chips, while red signifies photonic chips.
As AI increasingly shapes daily life, the industry is transitioning from centralised, cloud-based processing to distributed AI and ‘AI at the edge’. This shift will reduce energy consumption and latency, enabling faster and more responsive AI systems. Large language models and machine learning applications will increasingly depend on novel computing paradigms, such as neuromorphic and analog/photonic computing.
Rather than relying solely on large-scale, monolithic silicon chips, the industry is adopting chiplets and heterogeneous integration, combining different materials and functionalities in a single package. The silicon fabrication roadmap is progressing from the 4nm node size (2024) to an ambitious 0.7nm node target by 2034, vastly expanding chip-level capabilities.
To address intensifying cybersecurity challenges, software security will move towards memory-safe architectures like ARM’s CHERI, followed by quantum encryption. Simultaneously, Electronic Design Automation (EDA) tools will evolve to support interoperability across these technologies, leveraging AI to accelerate design and fabrication processes.
A dominant trend is the shift from traditional silicon-based microelectronics to heterogeneously integrated systems, combining silicon with photonics—highlighted through the colour coding in the diagram.
This transformation presents substantial opportunities for innovation across the semiconductor value chain, including:
- New photonic chip designs to accelerate AI hardware performance
- Novel chip architectures tailored for next-generation applications
- Advanced packaging techniques through heterogeneous integration
- Next-generation EDA tools to streamline the design and fabrication cycle of electronic-photonic co-design
Given the scale of investment and talent required, no single country is likely to lead across all areas of innovation. Instead, there is a strong case for strategic international partnerships that build on complementary strengths with like-minded nations. The UK’s leadership in Photonic Integrated Circuits (PICs) positions it as a key partner in the co-development of next-generation semiconductor technologies, securing critical supply chains.
CORNERSTONE, the UK’s highly regarded foundry for prototyping PICs, has already delivered over 800 chip designs to more than 100 customers across 20+ countries. CORNERSTONE’s customers have raised over £60m in venture capital in the past year, contributing towards the UK’s rapidly growing photonics industry, which is currently valued at £18.5bn. This foundry operates within the UK’s most advanced academic cleanrooms at the Universities of Southampton and Glasgow.
The UK also boasts a thriving semiconductor and photonics start-up ecosystem. Since 2023, companies supported by ChipStart UK, the UK’s flagship semiconductor incubator, have raised over £25 million in early-stage funding, with 40–50% developing photonic technologies. Furthermore, the UK is home to approximately 5,000 companies developing electronic systems using cutting-edge semiconductor and photonic solutions—around 90% of which are SMEs.
With its deep expertise in PICs and a dynamic innovation ecosystem, the UK is exceptionally well positioned to thrive in the evolving global semiconductor landscape. Start-ups and SMEs will be instrumental in driving this growth, aligned with the ambitions set out in the Government’s recently published Industrial Strategy.
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techUK's latest sprint campaign is on Robotics & Automation technologies. Find out how to get involved by clicking here.
Running from September to December 2023, this sprint campaign explored how the UK can lead on the development, application and commercialisation of space technologies, bring more non-space companies into the sector, and ultimately realise the benefits of the New Space Economy.
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Rory Daniels
Rory joined techUK in June 2023 after three years in the Civil Service on its Fast Stream leadership development programme.
During this time, Rory worked on the Government's response to Covid-19 (NHS Test & Trace), school funding strategy (Department for Education) and international climate and nature policy (Cabinet Office). He also tackled the social care crisis whilst on secondment to techUK's Health and Social Care programme in 2022.
Before this, Rory worked in the House of Commons and House of Lords alongside completing degrees in Political Economy and Global Politics.
Today, Rory leads techUK's emerging technologies activity across everything from immersive, web3, AI and robotics to space, gaming & metaverse.
This involves co-running techUK's flagship Innovation campaign, managing four series (including the 'Meet the Innovators' interview series), and launching 4-6-month 'sprint campaigns' on transformative technologies and sectors.
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Running from January to May 2024, this sprint campaign explored how the UK can lead on the development, application and commercialisation of the technologies set to underpin the Gaming & Esports sector of the future.
These include AI, augmented / virtual / mixed / extended reality, haptics, cloud & edge computing, semiconductors, and advanced connectivity (5/6G).
Activity took the form of roundtables, panel discussions, networking sessions, Summits, and thought leadership pieces. A report featuring member case studies and policy recommendations was launched at The National Videogame Museum in November 2024.
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Rory Daniels
Rory Daniels
Rory joined techUK in June 2023 after three years in the Civil Service on its Fast Stream leadership development programme.
During this time, Rory worked on the Government's response to Covid-19 (NHS Test & Trace), school funding strategy (Department for Education) and international climate and nature policy (Cabinet Office). He also tackled the social care crisis whilst on secondment to techUK's Health and Social Care programme in 2022.
Before this, Rory worked in the House of Commons and House of Lords alongside completing degrees in Political Economy and Global Politics.
Today, Rory leads techUK's emerging technologies activity across everything from immersive, web3, AI and robotics to space, gaming & metaverse.
This involves co-running techUK's flagship Innovation campaign, managing four series (including the 'Meet the Innovators' interview series), and launching 4-6-month 'sprint campaigns' on transformative technologies and sectors.
- Email:
- [email protected]
- LinkedIn:
- https://www.linkedin.com/in/rorydaniels28/
Running from July to December 2024, this sprint campaign explored how the UK can lead on the development, application and commercialisation of web3 and immersive technologies.
These include blockchain, smart contracts, digital assets, augmented / virtual / mixed / extended reality, spatial computing, haptics and holograms.
Activity took the form of roundtables, workshops, panel discussions, networking sessions, tech demos, Summits, thought leadership pieces, policy recommendations, and a report (to be launched in 2025).
Get in touch below to find out more about techUK's future plans in this space.
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Get in touch
Rory Daniels
Rory Daniels
Rory joined techUK in June 2023 after three years in the Civil Service on its Fast Stream leadership development programme.
During this time, Rory worked on the Government's response to Covid-19 (NHS Test & Trace), school funding strategy (Department for Education) and international climate and nature policy (Cabinet Office). He also tackled the social care crisis whilst on secondment to techUK's Health and Social Care programme in 2022.
Before this, Rory worked in the House of Commons and House of Lords alongside completing degrees in Political Economy and Global Politics.
Today, Rory leads techUK's emerging technologies activity across everything from immersive, web3, AI and robotics to space, gaming & metaverse.
This involves co-running techUK's flagship Innovation campaign, managing four series (including the 'Meet the Innovators' interview series), and launching 4-6-month 'sprint campaigns' on transformative technologies and sectors.
- Email:
- [email protected]
- LinkedIn:
- https://www.linkedin.com/in/rorydaniels28/
Running from February to June 2025, this sprint campaign is exploring how the UK can lead on the development, application and commercialisation of robotic & automation technologies.
These include autonomous vehicles, drones, humanoids, and applications across industry & manufacturing, defence, transport & mobility, logistics, and more.
Activity is taking the form of roundtables, workshops, panel discussions, networking sessions, tech demos, Summits, thought leadership pieces, policy recommendations, and a report (to be launched in Q4 2025).
Get in touch below to get involved or find out more about techUK's future plans in this space.
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Get in touch
Rory Daniels
Rory Daniels
Rory joined techUK in June 2023 after three years in the Civil Service on its Fast Stream leadership development programme.
During this time, Rory worked on the Government's response to Covid-19 (NHS Test & Trace), school funding strategy (Department for Education) and international climate and nature policy (Cabinet Office). He also tackled the social care crisis whilst on secondment to techUK's Health and Social Care programme in 2022.
Before this, Rory worked in the House of Commons and House of Lords alongside completing degrees in Political Economy and Global Politics.
Today, Rory leads techUK's emerging technologies activity across everything from immersive, web3, AI and robotics to space, gaming & metaverse.
This involves co-running techUK's flagship Innovation campaign, managing four series (including the 'Meet the Innovators' interview series), and launching 4-6-month 'sprint campaigns' on transformative technologies and sectors.
- Email:
- [email protected]
- LinkedIn:
- https://www.linkedin.com/in/rorydaniels28/
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