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British government wants to give money to chip companies

by on26 January 2023

Never mind the NHS, we want to feed a global oversupply

The UK government is trying to convince itself that if it spends billions to subsidise semiconductor companies it will help the country better compete and build resiliency and make the country great again.

Apparently, Tory Ministers who really do not understand how the chip industry works have been talking to chip companies promising billions of cash to startups and big businesses. A semiconductor task force is likely to be established to coordinate public and private support.

The logic is that chip shortages in the last few years have shown how much society relies on chips and now the government wants the country to boost its ability to manufacture these chips so it’s more resilient to shocks like COVID-19.

Of course, whoever is briefing the Tory government is unaware that the chip shortages would have happened if chips were made locally as raw materials are still part of the supply chain. What they might be aware of is that such incentives are a rather good way of moving money away from health, welfare, and defence and into the bank accounts of big businesses that will later reward them with a lucrative job once they quit politics.

Based on the figures from Intel, AMD and Nvidia any global shortage of chips was temporary and PC sales are falling. This means that by the time the UK government sorts out its cunning chip plan, it will be effectively chucking money at chip makers which cannot make many more chips.


Last modified on 26 January 2023
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