Shulou(Shulou.com)11/24 Report--

According to WeChat, the architecture of Richard Rogers (Richard Rogers) is famous for its inside-out architecture. The Inmos microprocessor factory built in Newport, South Wales in 1982 is no exception. The UK now sees the aging factory as a reflection of its inside-out, top-down policy on semiconductors.

It is owned by Newport Wafer Fab, the largest semiconductor manufacturer in the UK.

The plant was acquired by an Shi Semiconductor, a semiconductor manufacturer controlled by China Wentai Technology Co., last July. According to the Financial Times on July 16, the company sparked a debate over the need for a policy to support the UK semiconductor industry through funding, acquisition protection or direct investment.

At a time when economic nationalism is on the rise and supply disruptions related to the epidemic, the global chip manufacturing industry is mired in a geopolitical storm, affecting the production of smartphones, cars and computers. The United States, the European Union and China are all strengthening the top-level design of the semiconductor industry.

Newport fab can produce general-purpose chips as well as chips used in products such as electric cars or solar panels.

Western countries have been looking for ways to stimulate domestic manufacturing. In July this year, the United States passed the Chip and Science Act, which includes an allocation of 52 billion US dollars to support the manufacture and research and development of advanced chips. The EU has its own chip bill, a 43 billion euro plan to subsidize production in the trade zone. Last month, Italian Semiconductor and GE Core jointly built a new factory in France with strong support from the government, a plan that attracted people's attention.

In the UK, Newport fab is one of four companies that make up the Welsh semiconductor "cluster". The other three are IQE, SPTS Technologies and Microchip.

Last month, Kwasi Kwarteng, the UK secretary of state for business, energy and industry strategy, expanded his review to rule by early September on whether there was reasonable doubt that the acquisition "could pose a risk to national security".

Americo Lemos, chief executive of IQE, which makes semiconductor materials in Newport and Cardiff, said that while "governments have begun to take steps to support the industry's  , the UK has lagged behind in formulating specific policies to support the industry, and I am sure they know that."

Tom Tugenhart, chairman of the British Parliament's Foreign Affairs Select Committee, admits that Newport fab is not a cutting-edge chipmaker. Even the most enthusiastic advocates of British semiconductor design and manufacturing do not believe that the UK can compete with Asian giants such as TSMC or Samsung in chip manufacturing.

But Tugenhart said: "if you want to have domestic microchip manufacturing capacity, you have to have a starting point. You can start with a few 18-year-olds and a bucket of sand, or you can start with what you have."

Newport fab produces fine wafers that are cut into individual chips in a nearby building, with about 500 technicians wearing protective glasses and white "rabbit suits". It is an open factory that British start-ups can use to expand the next generation of compound semiconductors that support power systems, self-driving cars and quantum computing.

The debate over the future of Newport fab reflects broader concerns about the fate of another UK company: Arm, an internationally renowned chip designer.

The important role of ARM in the global chip IP demonstrates its status as a British national treasure.

In 2016, just days after Britain voted to leave the European Union, Japanese technology investor Softbank Corp. suddenly stepped in to buy Arm. At the time, Theresa May's government seemed relieved rather than worried, claiming it was a vote of confidence in Britain after Brexit. But many British technology advocates retort that this attitude is wrong.

The British government now sees an opportunity to correct its mistakes. Faced with his own predicament, Softbank Corp. first tried to sell Arm to Nvidia of the United States. The deal was opposed by the Competition Commission and was abandoned earlier this year.

Now the UK government is trying to persuade Softbank Corp. to list at least part of its stake in Arm in London and has considered invoking new national security legislation to persuade Softbank Corp. to do so. But Softbank Corp. suspended Arm's listing in London after political unrest caused by Boris Johnson's resignation as prime minister.

At the same time, some chipmakers, including Qualcomm and Intel, have expressed interest in forming a consortium to buy shares in Arm when it goes public to maintain its neutrality and protect parts of their supply chain.

Mr Tugenhart said the sale of Arm to Softbank Corp. was one of the "two most serious strategic mistakes" made by the government over the past decade (the other was the sale of DeepMind to Google). He believes the UK should buy the group's "gold shares" in case there are unpopular bidders in the future.

Herman Hauser, a veteran technology entrepreneur, was closely involved in the creation of Arm and opposed the sale of the company in 2016. He said the idea of gold stocks might be "a little ambitious", but he added faintly that "what impressed him was that the untech [political] class finally woke up" and was aware of the threat to the industry.

He said that for decades since Margaret Thatcher became prime minister in the 1980s, "we really made a mess of things".

Thatcher ushered in an era of openness to international acquisitions based on free markets. For years, domestic semiconductor manufacturers such as GEC, Plessey, Ferranti and Inmos have either declined or failed to expand.

According to the Financial Times, if the government had not privatised Inmos in the 1980s, we could not tell whether its innovative "transistor computers" would have become part of the UK's powerful chip industry. But the aversion to subsidizing or protecting "national industries" reflects attitudes towards the sale of Arm in 2016. As one former British security official points out, if there is a similar situation, "the Americans, French and Germans may have stopped it".

Geoffrey Irving, a former editor of the Financial Times, said: "much depends on changes in the country's politics over the next six to 12 months." Owen recently wrote a report on the UK semiconductor industry for Policy Exchange, a think-tank: "will we decisively stay away from open markets for foreign acquisitions?"

"I used to cite semiconductor manufacturing as an example to show that the government may have made a huge strategic mistake in the industry," says Giles Wilkes, a former adviser to Theresa May.

Wilkes, who is now a senior fellow at the Institute of Government think-tank, said Treasury officials had opposed that any government intervention could undermine foreign investment. "there is no fixed way for investors to trade securities with certainty," he said. "

The National Security and Investment Act (NS&I Act), which came into force in the UK in January, is a step towards establishing such an approach. It has identified several economic "sensitive areas", including advanced materials, artificial intelligence and quantum technology, including semiconductors, where buyers must inform the government of the acquisition.

Newport's decision, a retrospective provision of the bill, will be an early test of the government's insistence on using legislation to protect national security, rather than as an industrial policy tool to protect broader economic interests. Nicole Kar, the Linklaters law firm, said at a recent parliamentary hearing: "these are very important signals for investors. Does this have anything to do with today's political beliefs? is this a politicized process, or is it really about national security?"

A special committee of British MPs is investigating the strengths and weaknesses of the UK semiconductor industry and supply chain. The Department of Culture, Media and Sports is also reviewing the industry to see how to ensure a reliable and reliable supply of chips, the results of which will be released later this year.

Industry insiders agree that it is reasonable for the government to take the time to develop a coherent semiconductor strategy. Wave Photonics, a Cambridge-based start-up, hopes to use the Newport fab plant to help develop chips.

"while making a coherent policy, buying time will be a wise choice," said James Lee, the company's chief executive. "there is a degree of disappointment with policy inconsistencies and policy ambiguities."

He points to the risk that China will gradually overtake its competitors in semiconductor technology, while the UK does not feel the need (or ability) to respond.

The government said it was committed to supporting the industry and "capitalizing on its global strengths in areas such as design". It said it was reviewing the UK's capabilities "so that we can protect and develop our domestic industry and ensure that the supply chain is more resilient".

South Wales compound Semiconductor is lobbying to support professional branches of its industry. They believe that chips made from compounds such as silicon carbide or gallium nitride have many advanced applications and that compound semiconductors provide opportunities for more cost-effective investment.

Andrew Rickman, founder of Rockley Photonics, recently told a parliamentary committee that the UK could not catch up with advanced silicon chip makers such as TSMC. He suggested that it makes sense to use Newport fab as an open fab to expand the size of the next generation of chips.

"from the perspective of photonics, there will be great potential for the future in areas such as   and quantum computing," Andrew Rickman said. "

Political uncertainty also complicates policy-making. Both candidates who are now expected to be the next prime minister say it is possible to redefine trade policy and reshape an already fragile supply chain. However, the interdependence of these supply chains makes it impossible for any country or trading group to be self-sufficient in semiconductors.

Any British policy seems bound to involve other friendly partners, especially the United States and the European Union. However, since Brexit, the UK has adopted a semi-independent relationship with the EU's semiconductor programme. The link exists because both sides are interested in Britain's strength in compound semiconductors. Wyn Meredith, director of the compound Semiconductor Centre, a joint venture between IQE and Cardiff University, said strengthening cooperation with the EU was the government's "open goal".

The final risk for stronger industrial policy is that an excessive focus on security could discourage cross-border investment deals, which are the lifeblood of many start-ups. TechUK, an industry lobby group, warned that the use of the NS&I bill had led to "the cancellation of investments that were supposed to be low-risk and the transfer of projects to European competitors".

Hauser also sensed a kind of "hysteria" in the British approach. "my feeling is that as long as we have technological leadership in some areas, the only sensible strategy for dealing with China is to use it as a bargaining chip-if you want a wafer, you have to build a factory in the UK and hire a certain number of employees," he says. if you don't allow the Chinese to invest in Newport wafers, the company will collapse and you won't get anything in the end. "

At the same time, as UK reviews and investigations continue, companies in the industry are looking for other ways to grow and maintain their supply chains, even if it involves overseas investment.

Lemos of IQE, which also produces in the US, Taiwan and Singapore, said: "I suggest the government speed up this process because there is a window and we have to get things done, otherwise the company will make a detour."

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