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UK needs chip strategy to boost supply chain security, says Intel boss

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The UK’s lack of a microchip strategy will leave it in a disadvantaged position in semiconductor research and supplies, according to Intel’s European boss.

US-based Intel, one of the biggest players in the semiconductor industry, announced earlier this year a major investment of €33bn (£27.8bn) into research and development and manufacturing in the EU.

The investment – which was the initial phase of a total investment that could reach €80bn (£67.6bn) – was intended to “advance” the “world-class semiconductor ecosystem in Europe”.

Intel’s European investment came after the EU set out its semiconductor strategy under the European Chips Act, which aims to see 20% of the world’s microchips manufactured in the region by 2030.

The UK, meanwhile, has no such strategy ironed out despite the government’s intentions to reduce dependence on the Asian semiconductor industry.

“I think it is good [the UK is] making inquiries, but it needs to take the next step and make investments,” said Frans Scheper, the recently appointed European head of Intel.

Scheper encouraged western countries to increase semiconductor capabilities to cushion the blow of events like the chip shortage that stemmed from the pandemic.

“It’s about security and supply chains,” he said. “I am worried about protecting our IP in the western world and these factories take years to build.

“You can’t just say, ‘Yeah, there’s a shortage, let’s build a factory.’ They will be vital; everything will be built on this processing power.”

Scheper said that Intel currently “don’t have any plans to build a new facility in the UK”, and that while “there’s nothing to say [Intel] don’t want to invest there”, the investments into Europe were down to the EU’s semiconductor policies.

Britain’s largest semiconductor factory, Newport Wafer Fab, has been the subject of a national security review following its acquisition from the Chinese-owned firm Nexperia.

The security review was launched in May and has had a number of delays and extensions announced by business secretary Kwasi Kwarteng.