The Council for Science and Technology (CST) has published a report outlining the importance of the UK establishing a sovereign AI chip design industry, providing the government with six recommendations for how this could be achieved.

Formed of 19 independent members, the CST provides advice to the Prime Minister on science and technology policy issues across government.

In its opening summary, the report, titled Building a sovereign AI chip design industry in the UK, states that semiconductors have “rightly been identified by the government as a priority technology for the future of the UK,” with their development underpinning many of the government’s strategic goals across a variety of different sectors.

Despite this, the council acknowledges that the UK’s chip industry is “niche and highly specialized” and that a “broad, generalised approach” will not allow the country to sufficiently catch up to the current front-runners. Instead, CST says strengthening the UK’s semiconductor industry will require investment and activity in areas where the country can achieve the greatest strategic advantage, namely in AI chip design – which it labels as one of the fastest growing industries in the world, and says should not be conflated with the chip manufacturing sector.

“We have strong AI and design expertise and creativity in our universities; a growing ecosystem of AI companies; and ARIA’s Scaling Compute program has identified and brought together, for the first time in the UK, talent and ideas with the potential to create novel vertical AI systems,” the report says.

“However, this would require bold commitments from the government to put the right foundations in place, including the training of an AI chip workforce. We believe this is likely a once-in-20-years opportunity for the UK to build a profitable AI chip design industry in one of the largest markets in the world.”

What the CST is recommending

The six recommendations outlined by the council fall into three categories: skills, finance and investment, and infrastructure.

Recommendations one and two state that the Department for Science, Innovation, and Technology (DSIT) and the Department for Education (DfE) should increase the number of new chip designers in the UK workforce by 2030 to 12,000, and additionally consider how to expand investment in training and skills for optoelectronics, in particular through the Optoelectronics Research Centre (ORC).

This could be achieved by training more chip designers via higher education programs, with the need for universities to reintroduce electronics and chip design courses covering computer architecture, chip design, verification and validations, and optoelectronics, the report says.

The UK should also attract chip designers by funding bursaries for students looking to study chip design, and work with third-party organizations that offer access to chip design services in collaboration with established links to semiconductor firms.

Regarding the two investment and financing recommendations, CST’s third suggestion calls on DSIT and the Ministry of Defence (MOD) to set “clear strategic objectives on semiconductors to send a strong signal to the UK semiconductor industry on where activity is most useful.”

The report states that it is a “lost opportunity that DSIT and MOD do not coordinate more closely on their analysis and spending,” and that both departments should collaborate more closely to analyze the risks and opportunities in semiconductors and coordinate investment.

The fourth recommendation focuses on coordinating investment “through the entire innovation pipeline,” and, in order to support growth in the UK AI chip sector, funding for areas where there is less growth should be deprioritized.

“Targeted investment may require trade-offs to be made. Although the UK has a history of investing in compound materials, DSIT should consider deprioritising them in favour of activity in support of AI chips. Within the field of compound materials, optoelectronics should continue to be a relatively high priority as the market for it is expected to grow at a greater rate,“ the report says, adding that the government should also explore investment in advanced chip assembly and packaging, a part of the industry that will “continue to grow because of the demanding requirements of AI chips.”

The final two recommendations relate to infrastructure, calling on DSIT to ensure the UK’s semiconductor infrastructure provides chip companies and academics with “affordable and timely access to facilities.”

The remit and capabilities of existing catapults, such as the Compound Semiconductor Applications Catapult, are not currently best serving the UK’s chip sector, as the services are often expensive and the time to market is slow. CST says the establishment of the UK Semiconductor Centre – announced in June 2025 – will be a “positive step towards providing this coordination, but “government should be bold in deprioritising funding for infrastructure which is not fit for purpose.”

The report also says that DSIT, MOD, and the Department for Business and Trade (DBT) should explore UK access to leading-edge technology required by UK startups, suggesting that the government pursues a fabless approach – where chip fabrication is outsourced to overseas foundries.

“UK startups will require access to leading-edge technologies such as masks and multi-project wafers (MPWs), and licenses for Electronic Design Automation (EDA) tools and Process Design Kit (PDKs)… [but] these technologies are expensive, and typically held by major chipmakers based overseas, such as TSMC, Samsung, and Intel,” CST notes.

“While startups can negotiate directly with chipmakers for access, this may be prohibitively costly, so the UK should look to negotiate as a nation, include access and licenses in the negotiation of international trade agreements, or enable access as part of the UK funding mechanisms set out in recommendation 4. DSIT, DBT, MOD, and HMT (HM Treasury) should consider the need for access to these technologies as part of their analysis and coordination.“