Daily Times

LONDON, May 19 (Reuters Breakingviews) – Prime Minister Rishi Sunak is taking a small step in the right direction. After much hesitation, Britain announced on Friday it would invest 1 billion pounds in its domestic semiconductor industry, with a focus on chip designs.

The approach makes sense. Britain plays a relatively insignificant role in chip manufacturing, which is dominated by Taiwanese giant Taiwan Semiconductor Manufacturing Company (TSMC) (2330.TW).

Nor does it produce the equipment needed to build advanced chips, the realm of Dutch giant ASML (ASML.AS). But the UK is home to top chip designers Arm and Imagination Technologies. With over 110 semiconductor design firms, Britain can probably claim to be Europe’s leader in the segment.

Even so, the money allocated may not be enough to move the dial. Under Sunak’s plan, Britain will invest 200 million pounds by 2025, with the full 1 billion pounds achieved over the next decade.

That’s proportionately lower than $53 billion of planned U.S. chip subsidies. Britain admittedly doesn’t have the fiscal room to copy Joe Biden’s expensive plan. And it isn’t trying to replicate the entire semiconductor supply chain at home.

But if the UK’s new support ends up being spread too thinly over too many years and projects, Sunak won’t get any plaudits for picking the right strategy. (By Lisa Jucca)