UK silicon startups to share £1.3M chump change as part of chip strategy

Crumbs compared to the billions thrown about in US and Europe

The UK government has announced the ChipStart program as part of its National Semiconductor Strategy, which will see a dozen silicon startups share £1.3 million ($1.58 million) in funding.

This two-year pilot program was confirmed by the Department for Science, Innovation and Technology (DSIT) as part of a long-awaited semiconductor strategy that was finally published earlier this year.

ChipStart aims to provide early-stage companies involved in the design of semiconductors with the technical and commercial help they need to bring new products to market, DSIT said, and will be delivered through "startup accelerator" SiliconCatalyst.UK.

Some of the benefits the 12 outfits are expected to gain from participating are access to bespoke chip design tools, commercial expertise, specialized mentorship, and networking opportunities with prospective investors and partners.

Announcing the program, Minister for Tech and the Digital Economy Paul Scully said in a statement: "Semiconductors are the bedrock of our modern economy and an increasingly integral part of our lives. These firms are building on Britain's research leadership to open doors to innovation and growth, while designing chips that could truly change the way we live our lives."

The move follows the first meeting of the UK Semiconductor Advisory Panel in August, co-chaired by Scully and the former chief executive of Dialog Semiconductor, Dr Jalal Bagherli, which aimed to advise the government on how best to support the UK chip industry.

Among the 12 companies that have been accepted into the ChipStart program are MintNeuro, which claims to be pioneering the use of semiconductors for implants for patients with neurological conditions, and two companies said to be developing silicon for artificial intelligence – Mignon is working on a co-processor and technology stack for inference and training at the edge, while Vaire Computing describes itself as an "unconventional computation company" that is still in stealth mode.

Another company, Blueshift Memory, is developing a new high-performance memory architecture, Wave Photonics is working on silicon photonics, and RED Semiconductors claims to be developing a vector instruction set processor for encryption, security, and AI at the edge.

The program will run two consecutive cohorts and end in March 2025. It is expected that on completion, the pilot will provide the UK semiconductor industry with a pipeline of new startups that have an innovative product, route to market and routes to future seed funding.

DSIT trumpeted the launch as delivering on a key commitment made in the National Semiconductor Strategy – to build on the UK's strengths and skills in semiconductors while helping domestic chip firms to grow.

However, the £1.3 million funding for the program again raises the question of whether the UK government is serious about ensuring the success of the country's semiconductor industry, especially when compared with the billions being stumped up by other countries.

When the government unveiled its semiconductor strategy in May, it said it would invest up to £200 million ($248 million) over the period 2023-25, growing to a total of £1 billion over the next decade.

Speaking at the time, Amelia Armour of tech investor Amadeus Capital Partners described it as "disappointing" compared with the investment levels announced as part of the EU and US Chip Acts, and that the £200 million over the next two years "won't achieve much" and will need to be allocated "in a very targeted way" to have impact.

Andrew Buss, senior research director at analyst IDC, told The Register: "In terms of semiconductor product design and production lifecycles this sum spread between 12 companies is indeed almost insignificant. However, it would seem this is a concentrated fund designed to invest in providing access to advanced tools that each could otherwise not afford individually so can help accelerate their time to market and reduce risk and capital spend to increase the chance of viability.

"But it's still worth bearing in mind that this amount is a tiny fraction of a percent of what the main chip design and fab companies will spend on their capabilities on a daily basis, let alone annually. Many startup companies will still be better served either getting on a major semiconductors partner program to get access to their own portfolio of tools, or to gain access to funding through the VC arm of a major player which also typically eases access to internal capabilities to help better co-design and optimize designs. Right now, a chip startup would potentially get more funding and support through approaching Intel Foundry Services if they have a viable business model than through a scheme such as this, especially as this is not an end-to-end program."

As a reminder, Washington is allocating $52 billion in subsidies to boost semiconductor manufacturing in the US, while the EU has agreed a €43 billion ($47 billion) funding plan to attract chipmakers to set up facilities within the territory of its member states. ®

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