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    Rishi Sunak to unveil institute that will turn Britain into world leader in microchip manufacturing

    Prime Minister Rishi Sunak does not want to follow the lead of the EU and US in providing generous subsidies for a critical industry. Credit: REUTERS/Russell Cheyne

    Rishi Sunak to announce plans for cutting-edge semiconductor research institute as ministers seek to secure UK leadership position in microchip development.

    Prime Minister expected to announce plans under £1bn funding. The semiconductor strategy is due to be announced at the G7 meeting in Japan this month.

    The long-delayed strategy is expected to include hundreds of millions of pounds in domestic production, but will fall short of the tens of billions in subsidies the US and EU are offering.

    Western governments are seeking to shore up semiconductor supplies amid fears they overly dependent on Asia for microchips, which are central to electronics, as well as vehicles and modern weapons.

    1904 Western chip production declines

    A A funding notice from UKRI, the government's innovation funding agency, describes plans for a £10m 'innovation and knowledge hub' to be approved the day before the G7 summit on 19 May.

    B the notice states that the center will be set up “to develop sovereign capabilities and enable the UK to go beyond Moore's Law”, referring to the trend towards microchip speeds roughly doubling every two years.

    One source. with knowledge of the semiconductor strategy said the center would be modeled after Ireland's Tyndall Institute or Belgium's Imec, which have made several breakthroughs in miniaturization of electronics. .

    Ministers are reluctant to engage in a “subsidy war” with the EU and the US, which fund multi-billion dollar manufacturing plants.

    Instead, sources in Whitehall said the government's strategy will focus on capitalizing on the UK's design strengths, which have helped it build companies like Arm and Imagination Technologies.

    Manufacturing support is likely to focus on composite semiconductors that are different from commonly used silicon components but are central to applications such as powering electric vehicles.

    The strategy could also fund small-scale silicon production to ensure supplies for the country's critical applications.

    Semiconductor companies have criticized the government for delays in implementing the strategy and have threatened to move investments abroad.

    This was originally supposed to happen last year, but political chaos and reports of departmental disagreements over funding set it back.

    Last year, the government stepped in to cancel the sale of the Newport Wafer Fab. , the UK's largest semiconductor manufacturing plant, after it was bought by the Chinese company Nexperia.

    It is thought taxpayer money may be involved in the rescue deal.

    A government spokesman said: “Our future semiconductor strategy will determine how the government improves access to the sector. to the skills, facilities and tools for further growth and supply chain sustainability.

    “Strategy will be published in due course.”

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