Government Urged to Build a Sovereign AI Chip Design Industry
The UK must establish a sovereign AI chip design sector to safeguard its economic and security interests, according to a recent report from the Council for Science and Technology (CST). The advisory group, which provides independent advice to the prime minister and cabinet, recommends that Britain focus on its strengths in chip design rather than attempting to compete directly with global manufacturing leaders like the US, Taiwan, and South Korea.
While the UK's semiconductor industry remains niche and specialised, the CST highlights the country's expertise as a foundation to develop a meaningful global role in AI chip design—provided there is proper investment in skills, infrastructure, and strategic direction.
Arm: An Example of a Missed Opportunity
The report points to Cambridge-based Arm as a case where the UK missed the chance to convert domestic expertise into lasting strategic advantage. Once considered a national champion, Arm was sold to Japan's SoftBank in 2016 and is now listed on Nasdaq, with most of its workforce located outside the UK. Although Arm is investing heavily in AI-driven growth, the UK sees limited benefits from its success.
To regain momentum, the CST proposes a concrete goal: producing 50 British-designed AI chips over the next five years. Achieving this target requires coordinated efforts in training, infrastructure, and clear leadership from the Department for Science, Innovation and Technology (DSIT).
Six Key Recommendations
- Train thousands of new chip design engineers
- Create a national chip design curriculum with access to advanced tools through partnerships such as IMEC and Muse Semiconductors
- Expand research in optoelectronics via centres like Southampton's Optoelectronics Research Centre
- Coordinate investment with the Ministry of Defence using the National Security Strategic Investment Fund
- Ensure access to production testing facilities
- Define clear national objectives for the AI chip design sector
The CST warns that the UK already needs 7,000 new chip designers over the next five years, a figure that rises to 12,000 if the 50-chip target is to be met. Many universities no longer offer courses in electronics and chip design, so the council recommends developing a curated national curriculum combined with hands-on training. Access to advanced manufacturing technologies, like 16nm and 7nm FinFET processes, is also essential.
Risks of Foreign Dependence
The CST criticises the government’s AI Opportunities Action Plan, published earlier this year, for not mentioning British-designed chips in the proposed "AI Growth Zones." Without domestic technology, UK datacentres risk dependence on GPUs from a single foreign supplier, exposing the country to commercial and security vulnerabilities amid tariffs and export controls.
Industry Response
The report’s recommendations have received cautious optimism from the tech sector. Phillip Kaye, co-founder of Manchester-based data centre firm Vespertec, said the proposals provide a credible foundation for growth. He emphasised that while the UK is not yet an AI superpower, building AI chipmaking capacity is a logical step given the country’s semiconductor expertise and the presence of leading firms like Arm.
For government officials, this report highlights the urgent need for clear strategy and investment to secure the UK’s position in AI chip design. Coordinated action can help ensure the country benefits from innovation in a sector critical to both economic competitiveness and national security.
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