Science Minister, Lord Patrick Vallance, unveiled 16 projects set to benefit from a £11.5 million fund, provided by Innovate UK, during the opening of a G7 nations industry conference on Thursday, 26th September. The funding aims to drive innovation and foster the growth of UK-based semiconductor companies.

These groundbreaking projects, based across the country, are expected to elevate the UK’s semiconductor sector by advancing technologies that improve daily life, such as more efficient medical devices and energy-saving phone screens, while also spurring economic growth.

The announcement comes ahead of the Government’s International Investment Summit, an event that will highlight the UK as an attractive destination for business investment. This initiative further strengthens the case for the UK as a key location for companies looking to invest in cutting-edge industries.

A new report by Perspective Economics shows that the UK’s semiconductor industry, which includes over 200 companies specialising in research, design, and manufacturing, is currently valued at nearly £10 billion. The report forecasts this figure could rise to £17 billion by 2030.

Semiconductors, the tiny chips at the heart of everyday technologies from smartphones to renewable energy systems, are essential to global supply chains. This support will enable the UK to scale up domestic production and bolster supply chain resilience, ensuring the nation is well-positioned for the future in a competitive global market.

The funding coincides with the launch of the G7 Semiconductors Point of Contact group, which held a stakeholder forum at Arm’s headquarters in Cambridge. Member states, research bodies, and industry leaders gathered to discuss pressing issues facing the global semiconductor sector, including support for early-stage innovation and the importance of sustainability.

Science Minister, Lord Vallance, said: “Semiconductors are an unseen but vital component in so many of the technologies we rely on in our lives and backing UK innovators offers a real opportunity to growth these firms into industry leaders, strengthening our £10 billion sector and ensuring it drives economic growth.

“Our support in these projects will promote critical breakthroughs such as more efficient medical devices that could significantly lower costs and faster manufacturing processes to improve productivity.

“Hosting the G7 semiconductors Points of Contact group is also a chance to showcase the UK’s competitive and growing sector and make clear our commitment to keeping the UK at the forefront of advancing technology.”

Among the funded projects, receiving a share of £11.5 million, is Vector Photonics Limited in collaboration with the University of Glasgow, which aims to enhance the power and cost-effectiveness of blue light lasers in everyday technology by using gallium nitride, a high-performance material. Blue lasers are key in devices like medical equipment, quantum displays and car headlights.

Another project, led by Quantum Advanced Solutions Ltd with the University of Cambridge, is developing advanced shortwave infrared (SWIR) sensors which improve vision in critical sectors like defence, by supporting surveillance in challenging conditions in low-visibility environments, such as during adverse weather conditions or atmospheric disturbances. The project looks to simplify production using innovative quantum dot materials – tiny semiconductor particles that emit light at specific wavelengths – offering higher sensitivity and performance, cutting costs and making this advanced technology more accessible to multiple sectors including manufacturing and healthcare.

Andrew Tyrer, Deputy Director, Electronics, Sensors and Photonics, Innovate UK, said: “Innovate UK’s investment in this programme directly supports the National Semiconductor Strategy launched in 2023 and aims to ensure the UK’s place in the global landscape.”

Iain Mauchline Innovation Lead - Electronics, Sensors, and Photonics at Innovate UK, added: “It has been recognised that semiconductors are key enablers for the UK ambitions across all critical technology areas. Funding these diverse projects highlights the strengths and depth of the UK’s semiconductor ecosystem.”

The G7 Semiconductors Point of Contact Group, established under Italy’s G7 Presidency earlier this year, continues its mission to address issues impacting the semiconductor industry, including early-stage innovation, crisis coordination, sustainability, and the impact of government policies and practices.

Rene Haas, CEO, Arm said: “It is an honour to host the stakeholder forum ahead of the G7 Semiconductors Points of Contact group at Arm’s global headquarters in Cambridge to advance collective efforts from industry, research organizations, and governments to increase supply chain resilience, security, and energy efficiency.  We look forward to continued partnership with the G7 representatives and the UK government as we work to enable innovation and realize the full potential of AI.”

This meeting immediately follows the OECD Semiconductor Informal Exchange Network gathering, where countries and stakeholders shared strategies for strengthening global semiconductor supply chains and addressing shared challenges in the semiconductor industry.

The UK is playing a key role in the OECD’s efforts to unite government and industry in navigating the complexities of the global chip supply chain.

Charles Sturman, CEO of TechWorks said: “This report represents the first detailed economic study of the UK Semiconductor sector in many years. I am proud to have been part of this important work and pleased with the results. Key findings here show that the UK already sees significant revenue from the sector and, by building on strong innovation, we can see significant opportunity to increase this together with our ~2% share of global semiconductor revenues; ultimately creating much more than the 86,000 jobs currently in the wider economy. The industry is set to grow rapidly in the next decade and the right mix of scaleup support and industrial policy can secure future growth of the UK semiconductor sector.”