Hannah Mullane, a BBC correspondent, recently visited Pragmatic Semiconductor, the UK's newest computer chip facility in Durham. Formerly a ceramic pipe factory, from the outside it looks like a large warehouse.
However, the large site is being turned into a sophisticated computer chip production hub. Pragmatic Semiconductor has already developed one production line, commonly known as a fabrication line or fab line.
Enclosed within a spacious chamber, the manufacturing line is equipped with all the costly tools required to manufacture computer chips, and the air quality is constantly regulated to prevent any contamination while the manufacturing process is underway.
Pragmatic has the funds to create another such production line, and investment of £182 ($230 million) announced late this year will go into production lines 3 and 4.
In addition to private investors, Pragmatic secured funding from British Patient Capital, a division of British Business Bank, and the government-backed UK Infrastructure Bank.
However, the Cambridge-based firm will require a lot more funding to wrap up the eight production lines it has planned to install in the old pipe plant.
From phones and computers to cars and washing machines, practically every product with an on/off switch is dependent on the production of computer chips, also known as semiconductors.
It is an industry that has experienced significant turmoil in recent years. During the pandemic, supply lines were disrupted, and geopolitical tensions arose in Asia, which manufactures 90% of the world's most advanced chips.
David Moore, CEO of Pragmatic Semiconductor, the largest semiconductor maker in the UK, believes the industry will require a variety of semiconductors to handle "different kinds of problems" in the chip industry.
Most semiconductors are composed of silicon, but his company uses an alternate process. Rather than sitting on a silicon wafer, Pragmatic's chips are built from a flexible thin sheet. This approach develops chips that are less expensive and faster to manufacture than traditional silicon chips.
"If you take a standard silicon manufacturing facility, it's going to take multiple years and billions of dollars to make," Mr Moore said. "Our fabrication plant can be 10 to 100 times cheaper depending on what you compare it with. In silicon, it will take three to six months to go from the start of the process all the way to a finished wafer product. For us, we can do that in less than 48 hours.”
But it is no panacea. The most sophisticated silicon-based computer chips will still be required to run phones, computers, and other cutting-edge technology, even though flexible chips can be manufactured more quickly and at a lower cost.
A significant shortage of such chips in 2021, illustrated how reliant the global industry is on a few key suppliers. For example, 90% of the most advanced semiconductors manufactured worldwide are produced by Taiwan Semiconductor Manufacturing Company (TSMC).
To reduce that dependency, governments are investing enormous sums to develop more robust local semiconductor sectors.
In August 2022, the US government signed the US Chips Act, which pledged $52 billion (£41 billion) to increase domestic computer chip production.
The European Union has its own initiative of €43 billion (£37 billion).
On a smaller scale, the UK has agreed to invest £1 billion in the sector.
Analysts believe that large chip manufacturers are responding to such government incentives.
Following the US Chips Act, approximately 500 firms sought the US government for project financing, according to Hannah Dohmen, a research analyst at Georgetown's Centre for Security and Emerging Technology in Washington.
Plants are planned for New York, Arizona, Texas, Ohio, and Idaho, she says. Other projects are also being planned outside of the United States and Europe.
"We're also seeing India attempt to enter the chip manufacturing space. A country that has a strong history in chip design but will be starting from scratch in manufacturing," Ms Dohmen added. "India is looking to be a big player in space, and with intensifying competition with China. This has prompted the US and other allied countries to strengthen tech cooperation with India.”
It all seems extremely promising, but establishing computer chip plants is not straightforward.
TSMC's plans to develop advanced semiconductors in Arizona have stalled, with the company blaming a dearth of experienced labour. Security experts are also concerned that the rush to develop plants in Europe and the United States would simply replicate what already exists in Asia.
