Biden will be laughing at Sunak’s flaccid microchip strategy
Ben Marlow
5 min read
Russia Faces New Threat: Ukraine’s ‘Toloka’ Underwater Maritime Drone, , , Russia Faces New Threat: Ukraine’s ‘Toloka’ Underwater Maritime Drone, Flag Ukraine The Russian Navy has a new problem in the Black Sea. Ukrainian group Brave-1 have shown their Toloka weaponized UUV (uncrewed underwater vehicle). The design is evidently intended to operate as a form of loitering torpedo., , The design consisted of a typical tubular body, but with a large keel and horizontal stabilizers amidships. Thrusters are mounted on the end of each horizontal stabilizer. Intuitively, these are used for steering as well as propulsion. This should allow significant agility. If the mast is always above water then, technically, you could argue that it’s a semi-submersible. In this case however that distinction may be unhelpful. It’s a weaponized UUV., LINK: http://www.hisutton.com/New-Ukraine-Underwater-Maritime-Drone.html - Simon Dawson / No 10 Downing Street
What comically bad timing. On any other day, there would be nothing to link the globe-trotting exploits of our Prime Minister and the fate of a single microchip designer back home.
How unfortunate, then, that as the Government sought to trumpet the prospects of the burgeoning sector on the international stage, fresh questions emerged about the financial health of one of its chief flag-bearers, Alphawave.
The company, which is the most valuable semiconductor business on the London Stock Exchange, admitted that its annual profits had been overstated to the tune of £6m, and that its finance chief was being fired as a result.
This is not the Global Britain that Sunak wants to promote. But then, the Government is perfectly capable of fluffing its lines without the help of others.
Set against the ambitions of America, Europe and other major competitors, the £1bn that has been earmarked – for what is meant to be an industry where Britain possesses cutting-edge skills and world-beating nous – looks like a rounding error.
HIROSHIMA, JAPAN - MAY 18: Prime Minister Rishi Sunak shows off his socks to Japanese Prime Minister Fumio Kishida, which has the name of Kishida's favorite baseball team, Hiroshima Toyo Carp, on them, during their bilateral meeting in Hiroshima ahead of the G7 Summit, on May 18, 2023 in Hiroshima, Japan. (Photo Stefan Rousseau - WPA Pool/Getty Images) - Stefan Rousseau - WPA Pool/Getty Images
Joe Biden has been accused of starting a new global trade war with his industrial subsidies blitz. But the White House may wonder whether Sunak, in his desperation to woo Kishida by wearing the socks of his favourite baseball team, missed off a zero, or perhaps even two, off the war chest that Britain has cobbled together.
No wonder then that within hours of the plan being published, prominent industry figures were queuing up to express dismay.
Expectations had been high for what is the first major state-backed support programme devised for the semiconductor sector since the 1980s. Downing Street promised the package would create jobs, economic growth, and technological breakthroughs.
It comes at a vital time, too. One of the big lessons that we were supposed to have learnt from the pandemic is the importance of national resilience and the dangers of relying too heavily on overseas supply chains thousands of miles away.
It began with shortages of protective equipment, which resulted in hundreds of millions of pounds being hastily squandered on kit, Covid tests and vaccines by incompetent Whitehall officials. Much of it was never needed. Mountains of it eventually had to be burned. The Department of Health wasted a scarcely believable £15bn on unused Covid supplies, according to the National Audit Office.
The supply shock that followed Covid is still reverberating today. Dwindling food supplies continue to leave big gaps on supermarket shelves, and the energy crunch hasn’t gone away despite wholesale prices plummeting. Both have been big contributors to record inflation.
Elsewhere, a dearth of building materials continues to act as a brake on the construction industry, and efforts to embrace the electric car revolution are being tested to breaking point by a severe deficiency in batteries.
But it is the global squeeze on semiconductors that is of most concern. They have been described as the building blocks of our technology-heavy 21st century society. Or as the Department for Science, Innovation and Technology puts it: “semi-conductors power our lives”.
They are found in just about every modern technology from mobile phones and computers, to planes, cars, hospital machinery, and the latest military equipment.
And yet if China invades Taiwan, the hit to the global economy would be many times greater than the shock that Vladimir Putin delivered with his war in Ukraine, such is the concentration of chip manufacturing in the East Asian island. With James Cleverly, the Foreign Secretary, warning recently that Beijing could destroy world trade with such an act, Britain – like others in the West – must now put the rocket boosters under domestic semiconductor supplies.
Simon Thomas, chief executive of British graphene semiconductor start-up Paragraf described the announcement as “quite frankly flaccid”. Garner consultant Gaurav Gupta dismissed it as “insignificant” if Britain wants to compete. Amelia Armour, an investor in British companies including Graphcore, the AI chip designer that is one of the UK’s most valuable start-ups, called it “disappointing” and “lacking.
Nigel Toon, chief executive of Graphcore, hailed the “recognition of the very valuable contribution that the sector makes” but added that “the overall level of investment, and the timescales” were “modest” compared to direct competitors such as Germany, South Korea and Japan. Others argue that we will remain heavily on Taiwan.
Not for the first time when it comes to industrial policy, there is a chasm between the Government’s rhetoric and reality. In the race for chip supremacy, the UK has predictably brought a pea shooter to a gunfight.
