UK government officials familiar with the matter have revealed that taxpayers could subsidize semiconductor companies to help the country better compete and build resilience in the increasingly important sector. Under the plans, seed money will be available for startups, help existing firms scale up, and new incentives for private venture capital. Additionally, a semiconductor task force could be established to coordinate public and private support.
A source told Bloomberg that the amount of aid the government could provide would be in the billions, but not in the double digits. However, no official figures have been provided. The shortages over the past few years have shown how much society relies on chips and now the government wants the country to increase its capacity to produce these chips so that it is more resilient to shocks like COVID-19.
While subsidies can help boost the UK’s ability to make semiconductors, they can also cause businesses to become financially dependent on continued government support. Furthermore, there is no guarantee that any money that is pumped out by the government will go to companies that can use the money more efficiently.
It is hoped that the government will evaluate the pros and cons of companies subsidizing people’s taxes and take the best course of action. When asked, a government spokesman declined to comment on the plans but said a semiconductor strategy would be published in due course.
Source: Bloomberg
