In a ‘shed surrounded by sheep’, a British pioneer eyes a slice of a £460bn industry

The founder of one of Britain’s most prominent computer chip companies has warned that red tape and planning delays are holding back Britain’s semiconductor industry.

Simon Thomas, chief executive of graphene chip company Paragraf, said it had taken him 12 months and £1m to install just one power cable.

“It would surprise you, I tell you, what has to be done just to plug something in,” he said.

Mr Thomas raised the alarm about Britain’s bureaucracy as he said that businesses like his were being feted internationally.

He told The Telegraph: “We get approached by the US frequently. Whether it’s Arizona, whether it’s Indiana, whether it’s North Carolina, we’re constantly being approached and they’re putting things on the table: ‘We can offer you this, we can offer you that’.”

Mr Thomas contrasted this approach with Britain, where Paragraf has had to battle against local planners and electricity companies to install a power cable to supply a new building at its Huntingdon headquarters.

Paragraf is one of a handful of British computer chip businesses whose future is a matter of governmental interest.

It is the only company in the world that uses graphene to make semiconductor chips using the same industrial processes as silicon, the material that currently dominates.

The 2004 discovery of graphene by researchers at the University of Manchester prompted some to dub it a “wonder material”. 200 times stronger than steel yet highly electrically conductive, the ultra-thin carbon-based substance has huge potential for a wide range of applications.

“Graphene has the potential to operate a processing chip over 1,000 times faster than silicon because of its electrical conductivity,” said Mr Thomas.

Such a technological leap would affect all of modern computing, from the giant data centres powering today’s advances in artificial intelligence down to the smartphones in our pockets.

He asserts that graphene can not only achieve this hoped-for jump in processing speed but do so while consuming 10pc less electricity than silicon-based chips.

By using similar processes to those adopted by silicon chip manufacturers, Paragraf hopes it can take advantage of existing technology to leapfrog its silicon rivals.

However, the promise has not yet been fully realised. 

Paragraf currently produces chips for its own limited product line, which include magnetic field sensors and sensors for use in life sciences. 

The products are a stepping stone towards the ultimate dream of manufacturing fully fledged graphene-based processors of the type that power PCs and smartphones.

Commercialising the technology is a slow march. The new Huntingdon foundry – the facility at the heart of the planning dispute over its power cable – will be capable of producing a million devices a month once it is up and running, said Paragraf’s boss.

“You might think ‘wow, that’s great’. TSMC [Taiwan Semiconductor Manufacturing Company] make a million devices every 20 minutes.”

Still, the potential of graphene-based chips has helped thrust Paragraf to prominence in the $574bn (£460bn) semiconductor industry.

The company’s promise is not obvious when looking at its headquarters inside a former double glazing factory. Staff joke that Paragraf’s building is a “shed surrounded by sheep”, presenting a very British contrast between the millennia-old scene of livestock farming and the cutting edge development that goes on inside.

The global semiconductor industry has rapidly risen up the political agenda in recent years amid growing concerns that China is preparing to invade Taiwan. 

The island nation is the linchpin of the global semiconductor industry, manufacturing around a fifth of the world’s supply and a far greater proportion of the most advanced chips.

Mr Thomas, who spent his early career working in Taiwan, said: “They invested heavily. They made the science parks, they invested in schools and universities for people to understand what high technology was.”

Taiwan’s gross domestic product trebled between the late 1990s and the present day, from around £250bn to £620bn, in large part thanks to world-renowned computer chip makers such as TSMC.

Mr Thomas, who has a doctorate in materials science and engineering, criticised the “lack of openness” around UK science parks and similar industrial innovation zones.

“We have the clusters like the semiconductor cluster down in South Wales, we have the catapult centres and so forth. But you try and get information between those different clusters or between those different investment activities. It’s really difficult to get a clear landscape picture.”

Rishi Sunak unveiled a £1bn support package for the semiconductor industry in May, split into an initial tranche of £200m followed by £100m per year.

However, the package is dwarfed by the Biden administration’s CHIPS Act in the US, which includes $52bn (£42bn) in subsidies to tempt chip companies to move to America.

UK chip companies including Pragmatic Semiconductor and London-listed IQE are setting up US subsidiaries as a result of Biden’s sweeteners.

Meanwhile, European Union leaders published plans in June to plough €8bn (£6.8bn) into similar subsidies, with Brussels expressing the hope this would be match-funded by around €14bn from private investors.

Mr Thomas said he is committed to the UK, but has been critical of the Government’s support in the past.

“While we welcome the publication of the semiconductor strategy and finally the Government’s commitment to driving this industry forward, the content is quite frankly flaccid,” he memorably said when the Government’s Semiconductor Strategy document was unveiled in May.

Other industry figures also criticised the package. Amelia Armour, a partner at Paragraf-backing venture fund Amadeus Capital, labelled it “disappointing”, adding that the UK “needs to try to keep pace with the investment levels announced as part of the EU and US chip acts”.

Scott White, founder of rival chip company Pragmatic Semiconductor, described the Government funding as “definitely at the low end of what’s going to be meaningful.”

Armour and White are both now members of the Prime Minister’s Semiconductor Advisory Panel, a body made up of academics, senior figures within the industry and prominent British investors. It is chaired by tech minister Paul Scully.

Mr Thomas, a fellow of the Royal Academy of Engineering, was rewarded for his outspokenness by being overlooked for a position on the panel.

“I keep my fingers very tightly crossed that the Semiconductor Advisory Panel will cause a change in the attitude of how the Government reacts towards industry needs,” he said, adding that the advisory body “has to be answerable to industry.”

“Because that’s the big thing that’s always been a problem in the past. Government or Civil Service application of assistance to commercial entities have always been done from the perspective of the civil service. And that’s not worked.”

While his criticisms are fierce, Mr Thomas insisted he is an “optimist” when it comes to the prospects for Britain.

“We’re going to make money out of it here,” he said, adding that he had a “pigheaded” desire to “prove we can do it in the UK”.

A government spokesman said: “Our targeted semiconductor strategy doubles down on British strengths to cement our leadership role in an integrated global market.” 

Detailed subsidy allocations made through the “ambitious” strategy will be announced in autumn, the spokesman added.