UK government officials familiar with the matter have revealed that taxpayers could subsidize semiconductor companies to help the country better compete and build resiliency in the increasingly important sector. Under the plans, seed money for startups would be available, there would be help for existing firms to scale up, and there would be new incentives for private venture capital. Additionally, a semiconductor task force could be established to coordinate public and private support.
One of the sources told Bloomberg that the amount of support that the government could provide will be in the billions but not in double digits. No official figure has been provided, however. Shortages in the last few years have shown how much society relies on chips and now the government wants the country to boost its ability to manufacture these chips so it’s more resilient to shocks like COVID-19.
While subsidies could help to bolster the UK’s ability to manufacture semiconductors, they could also cause businesses to become financially dependent on continued government support. Furthermore, there’s no guarantee that any money the government dishes out would be given to those companies that could use the money most effectively.
Hopefully, the government will weigh up the pros and cons of subsidizing companies with people’s taxes and take the best action. When asked, a government spokesperson refused to comment on the plans but said that a semiconductor strategy will be published in due course.
Source: Bloomberg