Sunak insists UK Government’s £1 billion semiconductor strategy will help Newport Wafer Fab

The UK’s £1 billion pound investment in the semiconductor industry will benefit UK manufacturers, Rishi Sunak has insisted, after being warned the proposals were too focused on research.

MPs told the Prime Minister that the funding would not do enough for microchip makers such as Newport Wafer Fab, as it was mainly geared towards research and development.

Mr Sunak unveiled the UK semiconductor strategy at the G7 summit in Hiroshima, Japan on Friday, aimed at giving the country a “competitive edge on the global stage” and ensuring it is not reliant on China for technology advancements.

Ministers ruled last year that Nexperia, a company with links to the Chinese state, must divest from its ownership of Newport Wafer Fab, one of the UK’s largest manufacturers of semiconductors.

As the Prime Minister answered questions about the Japan summit, Labour MP Ruth Jones told the Commons: “Many people in Newport West have been eagerly waiting for the Government’s semiconductor strategy, including 600 hardworking employees at Newport Wafer Fab.

“But after three years of waiting, rather than coming to this House, the Prime Minister made the announcement in Japan on Friday last week, avoiding parliamentary scrutiny yet again. That is unacceptable in my view.”

She asked: “How can we expect effective research and development to be carried out within the semiconductor industry, as trumpeted by the strategy, without well-funded domestic manufacturing capacity?”

Strengths

The Prime Minister replied: “Every country has different strengths, every country plays a different role in the supply chain.

“We are focused on what we do best, which is in compound semiconductors which she will know well from South Wales, but also semiconductor design and IP (intellectual property).

“Those are the strengths we are investing in, which give us leverage in a very large global supply chain, which is why it was warmly welcomed and it is the right strategy to strengthen our security.”

Plaid Cymru MP Hywel Williams (Arfon) said: “The semiconductor partnership with Japan is very welcomed indeed, but the Prime Minister mentioned some domestic investments to the member for Newport West (Ms Jones) a moment ago.

“That £1 billion I understand is focused entirely on research. Is he similarly committed to manufacturing, for example at Newport? Or is he happy to leave that to Taiwan, the United States, and of course to the European Union?”

Mr Sunak responded: “What we are focused on is growing our semiconductor industry and making sure we are resilient against future shocks.

“There are lots of different ways that we can do that. Indeed we just signed a new semiconductor deal, as he acknowledged, with Japan and we will continue to find opportunities to do that with others.

“But the idea that we could insource a global manufacturing supply chain into the UK is simply not right. What we should do is focus on our strengths.”

The Prime Minister added: “We have got a strategy that works for the UK’s strengths, particularly works for South Wales, and I am very confident that it will be successful.”

During his trip to Japan, Mr Sunak agreed a partnership on semiconductors with Tokyo as part of efforts to reduce the reliance on Beijing for the supply of the essential microchips.

Britain and its Western allies are taking an increasingly hawkish stance towards Chinese technology, including in their communication networks and surveillance equipment, over fears President Xi Jinping’s national security laws could force the Far East country’s tech giants to hand over foreign data to the ruling Communist Party.