British lawmakers say business at risk from lack of chip support

LONDON (Reuters) - Britain must support its semiconductor industry to win inward investment and secure supplies of the chips essential to its industrial and economic prospects, a group of lawmakers said.

Spurred by a global shortage, governments in the United States and Europe have ploughed tens of billions of dollars into semiconductors, including building new manufacturing "fabs".

Britain, however, had not published its promised strategy on the sector and risked falling behind in securing inward investment, the lawmakers said in a report on Monday.

"The government is putting UK plc at significant risk by failing to take action in support of the semiconductor industry," said Darren Jones, chair of the business, energy and industrial strategy committee.

The committee said Britain should cooperate with the United States under its CHIPS act, and engage with Taiwan, which is the world's biggest manufacturer of advanced chips.

The lawmakers said while Britain's semiconductor industry was relatively small, it had world-leading capabilities in fields such as design, intellectual property and compound and advanced material semiconductors.

Britain's most important microchip factory - Newport Wafer Fab - in south Wales was acquired last year by Nexperia, a Netherlands-registered company owned by China's Wingtech.

The British government ordered Nexperia to sell at least 86% of its shareholding in Newport Wafer Fab earlier this month, citing a national security risk. Nexperia said it would appeal the decision.

The lawmakers said in the report that following the Nexperia decision, ministers must engage with potential buyers to secure the future of the vital semiconductor cluster in South Wales.

"We are reviewing our domestic capabilities and working closely with industry and international partners to develop a new semiconductor strategy which will grow the sector further and make sure our supply chains remain resilient," a government spokesperson said.

"Our strategy will be published as soon as possible."

(Reporting by Paul Sandle, editing by Elizabeth Piper and Alexander Smith)