UK Semiconductor Giant Pragmatic Calls for Enhanced Tax Benefits to Boost Industry Growth

Britain’s largest chipmaker has urged the government to establish a more competitive landscape through enhanced tax incentives, bringing the nation in line with global competitors in the semiconductor industry.

Pragmatic’s Chief Executive Dave Moore emphasised the critical need for Britain to match international standards, particularly highlighting the disparity in electricity costs which remain higher than most European counterparts. The call for reform comes as Western nations intensify efforts to reduce dependence on Asian semiconductor manufacturing.

The company, which secured £182 million in financing during 2023, operates a state-of-the-art fabrication facility in Durham capable of producing billions of chips annually. Their innovative approach involves creating ultra-thin, flexible chips suitable for smart packaging and digital identification applications.

Moore suggested that Britain’s current £1 billion decade-long industry support package, while welcome, falls short when compared to substantial investments made by the European Union and United States through their respective chips acts. The existing full expensing scheme, he noted, might not sufficiently address the industry’s lengthy investment-to-revenue cycle.

The Labour Party’s industrial strategy, spearheaded by Rachel Reeves, has identified advanced manufacturing as a key growth sector. However, specific semiconductor industry provisions remain notably absent from the broader economic vision.

Pragmatic’s Durham facility stands as Britain’s first 300mm chip manufacturing plant, representing a significant milestone in domestic semiconductor production. The company’s expansion plans include constructing nine fabrication lines, demonstrating strong confidence in the UK’s manufacturing potential despite current regulatory challenges.

The Department for Science, Innovation and Technology maintains its commitment to industry growth through the National Wealth Fund, though industry experts suggest more targeted measures may be necessary to achieve global competitiveness.