The U.K. has officially left the European Union, but semiconductor development is emerging as a key area for collaboration aimed at achieving improved economies of scale and securing crucial funding. In a recent announcement, the government revealed its participation in the EU’s “Chips Joint Undertaking,” allowing U.K. organizations to access a funding pool of €1.3 billion (approximately $1.4 billion) dedicated to semiconductor research and development. The U.K. government will contribute £35 million ($44 million) over the next few years to support domestic initiatives in this field.
Initially, £5 million will be allocated to assist researchers and businesses in the U.K. with their applications for funding, as disclosed by the government on Wednesday. The remaining £30 million will be distributed between 2025 and 2027 to further enhance research endeavors in the semiconductor domain.
Chips are a critical and highly valuable component for the advancement of future technologies, fueling innovations in artificial intelligence, next-gen consumer electronics, and electric vehicles. However, the semiconductor development landscape is quite fragmented and competitive, with the government estimating that “tens of thousands of U.K. companies” are eligible for grants averaging up to £450,000 each.
For those interested in applying, the deadline is May 14.
This move illustrates the U.K.’s recognition that, post-Brexit, it cannot navigate the technological landscape independently. The announcement aligns with partnerships the U.K. has formed with countries like South Korea (for data sharing), Canada (for science and innovation), and the United States (for comprehensive tech and data agreements).
In Europe, while budgets are considerable, they are also somewhat complex. The Chips Joint Undertaking has an overall budget of around €11 billion sourced from both public and private contributions. This initiative stems from the European Chips Act, passed in 2023, aimed at reducing the region's dependence on semiconductor imports amid emerging geopolitical tensions.
The R&D facet of the initiative is part of the Horizon Europe program, which has a total budget of €95.5 billion for research across various sectors. The U.K. joined Horizon Europe separately last year, and recipients of grants from this program include Nova Innovation, awarded £17 million for tidal energy projects in Orkney, and “The Floow,” a startup that received £3 million for road safety technology.
U.K. Technology Minister Saqib Bhatti announced the new partnership at a semiconductor conference held in London on Wednesday. In a discussion, he highlighted that the primary benefit for U.K. organizations is access to EU funding, while also noting the country's commitment to contribute cutting-edge research.
In today’s competitive chip environment, where the demand for powerful yet efficient chips capable of handling significant compute workloads for AI and other advanced technologies is intensifying, R&D is increasingly recognized as a crucial factor for success. “We bring a wealth of talent and experience to the table,” Bhatti stated. “I’m currently engaging with businesses in the semiconductor sector, and the focus is on investing in the U.K., leveraging our ecosystems, and actively participating in R&D. It’s essential to emphasize the importance of our R&D capabilities, as we approach this as equal partners.”
The U.K. has played a pivotal role in advanced chip research, though like many areas of technology, the market has largely been dominated by a handful of major players, impacting its ecosystem. Cambridge-based Arm, a leader in chip reference design, recently completed a successful public offering following the collapse of a proposed sale to Nvidia on antitrust grounds—though Nvidia has quietly acquired a stake in Arm.
In contrast, Bristol-based Graphcore, a promising startup in the sector, is reportedly seeking a buyer at a fraction of its former multibillion-dollar valuation. Nevertheless, there are other emerging players worth noting. In December 2023, Pragmatic Semiconductor, another company based in Cambridge, raised $231 million at a $500 million valuation, with the U.K. government among its major investors.
Jari Kinaret, executive director of the Chips Joint Undertaking, expressed enthusiasm about the U.K.'s participation. “We are very happy to welcome the UK to the Chips Joint Undertaking as a participating state. We look forward to collaborating with U.K. partners to strengthen the European microelectronics ecosystem and maintain the continent’s leadership in scientific and technological innovation within semiconductor technologies and related fields.”
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