News reaction: UK launches much anticipated semiconductor strategy

Last week, the UK Government unveiled its much-anticipated National Semiconductor Strategy at the G7 leaders’ Summit in Japan, aimed at developing the UK’s strengths within semiconductor research and development (R&D) and manufacture, safeguarding its supply chain against disruption and securing the UK against the security risks associated with such technology.

As part of the Strategy, the Government has promised to invest up to £1 billion over the course of the next ten years, to ‘improve access to infrastructure, power more research and... facilitate greater international cooperation’.

To help grow the UK’s semiconductor, the Government plans to deliver measures including a new National Semiconductor Infrastructure Initiative, which will look at how access to prototyping facilities for chip firms could help tackle growth barriers and drive industry innovation; an incubator pilot for semiconductor start-ups, and industry-led learning to help address skills gaps to in areas such as electronic engineering and computer science. The safeguarding of supply chains will focus heavily on global cooperation and partnerships with the likes of Japan and the Republic of Korea.

The strategy also focuses on how the UK’s industry can protect against security risks. Semiconductors underlie millions of products and services that make up the fabric of our daily lives, from power grids to mobile phones. Vulnerabilities within semiconductors therefore leave such devices and networks equally at risk.

In its Strategy, the Government has acknowledged ‘that a compromise to the cyber security of hardware’ is not acceptable and put forward actions including a focus on building secure chips through the existing Digital Security by Design programme.

Supply chain difficulties have also exacerbated vulnerabilities. As demand for semiconductors continues to outstrip supply, it has left nations reliant on complex global supply chains where potentially untrustworthy third-party entities may be involved. This can result in the insertion of hardware trojans – a malicious modification of semiconductors’ circuitry used for surveillance or as ‘backdoor’ from which an attacker can mount a cyber attack.

We have also witnessed ransomware attacks against key links in the semiconductor supply chain and hostile actors have been successful in exploiting unintentional security vulnerabilities in semiconductors, such as in the case of ‘Meltdown’ and ‘Spectre’; architectural flaws found in modern microprocessors underpinning many desktops, laptops, and mobile devices which have been widely exploited for malicious purposes.

As society becomes ever more connected and advanced solutions like the Internet of Things (IoT), artificial intelligence, and 5G – all of which rely on semiconductors – are adopted at scale across critical national infrastructure (e.g. the rollout of smart meters and smart electric vehicle charge points in the energy sector), the semiconductor risk landscape will continue to evolve.

James Williams, Head of Telecoms, Media and Technology at NCC Group:

“The release of this strategy is hugely welcomed, given the immense pressures the semiconductor industry is currently under.

“It’s also particularly important given the recent spending commitments the government laid out for the likes of quantum computing and AI in its budget, too. If the UK is to reach its potential as a science superpower, ensuring the supply and security of semiconductors – which underlie so many aspects of these technologies – is critical.

“It’s reassuring to see consideration of how the UK must work with its allies to improve supply levels. The UK’s semiconductor industry will never be wholly sovereign. Completely onshoring chip production is likely to be economically unviable. We must therefore identify and build partnerships with allied nation states who can produce the volume, the quality, and with the required levels of trust to support the UK’s domestic markets, whilst promoting and enhancing areas where the UK can take a leading position such as R&D and the commercialisation of British intellectual property.”

“The recent supply constraints have shown how vital the industry is to the functioning of the economy and the UK’s infrastructure. We recently witnessed a devastating cyber attack on a key semiconductor supplier that significantly constrained global supply. The Government therefore needs to hold the industry to the same security and resilience standards as the likes of energy, transport and healthcare. The focus on building cyber secure chips, through the Digital Security by Design programme, is particularly welcome in this regard but more can be done. The Government must keep cyber resilience under close review and consider establishing the industry as critical national infrastructure, to aid efforts to protect against such threats."