Graphene startup Paragraf threatens US move due to government semiconductor failings

Graphene startup Paragraf threatens UK exit to US

The CEO and co-founder of Paragraf, a British startup commercialising graphene-based electronics, has threatened to move its base to the US due to the lack of a government semiconductor strategy and challenges attracting talent post-Brexit.

“The UK’s delay in deciding a semiconductor strategy, and time that is wasted waiting on clarity from the government, increases pressure on companies that are being courted by alternative locations,” Paragraf chief Simon Thomas told UKTN.

“Paragraf has always regarded offshoring as a last resort. We remain hopeful that government will invest in reducing barriers, both to attracting talent and to developing the high-tech manufacturing infrastructure we require.”

It comes as Thomas told The Times that the UK government “doesn’t know what it’s doing” and said there was not enough support for university spinouts.

Graphene has been hailed as a “wonder material” because of its unique properties. It is highly conductive, able to withstand extreme levels of electricity and balances strength with flexibility.

Paragraf formed as a spinout from the Department of Materials Science at Cambridge University in 2015 and has developed a method to use graphene as a base for semiconductors.

It has raised more than $85m in funding, with $60m of that coming in a Series B funding round in March to scale up its international growth. It has received government backing via the Future Fund: Breakthrough scheme.

Its primary products, the graphene hall effect sensor range, are used in a vast array of industries including aerospace, healthcare and quantum computing.

“I know three quantum computing companies saying this would be much better in the US,” Thomas told The Times.

Thomas added that there was “paralysis” from the government and singled out the lack of clarity over its semiconductor strategy.

“By removing obstacles to development, government can help companies to develop a more-complete semiconductor ecosystem in the UK,” Thomas told UKTN.

UK’s silicon sorrow

The strategic importance of semiconductors has been underscored by the chip shortage blighting industries ranging from automotive to consumer electronics throughout the pandemic.

In June, semiconductor stakeholders criticised the government for a lack of national direction, while China and the US have earmarked billions in investment for their own strategies.

Flailing efforts to sway Cambridge-based chip designer Arm to list in London instead of the US further demonstrates the UK’s weakened semiconductor position.

Thomas’ criticisms echo those of Arm co-founder Hermann Hauser, who told UKTN in June that British politicians are “technologically illiterate” and the “root cause” of the wrangling over the company’s future.

A government spokesperson said that it was “committed to supporting the semiconductor industry and is reviewing our capability and working closely with the industry so we can grow the sector and ensure greater supply-chain resilience”.

On Monday the government launched a scaleup visa in a bid to attract more high-skilled tech workers to the country and plug the skills gap.

However, trade body techUK warned that the cost of the points-based immigration system was “compounding the struggles of UK businesses to recruit the digital skills they need”.

Updated to include additional comment from Paragraf.