UK Government unveils £10 million semiconductor fund as Microelectronics UK expo opens

25 Sep 2025

New London-expo brings together photonics, semiconductors, and embedded systems, under a microelectronics umbrella.

New tech expo Microelectronics UK 2025 opened in London, UK, on Wednesday, September 24th, with an announcement from the Government’s Technology Minister Kanishka Narayan MP – a new £10 million Innovate UK fund to boost the UK semiconductor SME ecosystem.

Alongside this, speakers from industry association TechUK, panels on smart mobility and AI, and a collaboration with Malaysia’s semiconductor leaders highlighted the UK’s role in this global business. There were also dedicated exhibitions and presentation programs on photonics, semiconductors and embedded systems.

The investment is expected to support up to 40 British businesses. “This funding will help early-stage companies innovate and bring new products to market,” said Narayan. “There’s a very clear focus right across this government, which is that semiconductors are a strategic priority for us,” he added.

Sue Daley, director at TechUK, outlined how the UK semiconductor industry can “move from ambition to execution”, expanding on the steps outlined in techUK’s Plan for Chips report published earlier in 2025. If the global chip market is heading for $1 trillion by 2030, the UK needs to turn strategy into serious action,” said Daley. “That is the biggest message from industry right now; we need to act.

“The National Semiconductor Strategy has made some positive strides with establishing the UK’s Semiconductor Centre, holding a lot of potential to coordinate efficient support for the sector. Now, we must focus together on delivery,” she added.

Panel sessions

Besides the headline talks, there were numerous panel sessions at Microelectronics UK, with one such example being at the Embedded Systems stage around smart mobility and software-defined vehicles (SDVs). Andy Birnie, VP automotive system engineering at NXP said that the data conversation around SDVs inevitably became an AI conversation: “Can AI be safe and deterministic as the automotive industry requires?”

James Dickie, sales director at ETAS, said, “I think the safety depends on how you’re training the models. At the moment, we’ve come from a background where you train a model to do a task, and that’s fine, but once you get into these vehicle applications, I think safety has to become part of the training.”

“I think as we move forwards, we’re moving to this AI economy. We’re also moving to agentic AI architecture,” said David Palmer, chief product officer and co-founder at Pairpoint by Vodafone. “When you do that, a lot of the car’s interaction is going to be through agents to other things such as payments, retail, safety, predictive maintenance. The car needs to move from being self-sufficient, to preparing to be interactive.”

Photonics focus

On the Photonics stage, John Lincoln, CEO of the UK Photonics Leadership Group, and SPIE’s European Strategic Relationship Advisor, gave a positive update on the state of and prospects for this sector.

Lincoln said, “UK photonics has grown into a £18.5 billion industry, with like-for-like revenue growth from 2022 to 2024 of over 16%, double the growth seen from 2020-2022. Like-for-like profit growth has been even higher at over 25% over two years, whilst employment in the industry has grown at 8.2% in the same period. 84,800 people are now employed in photonics in the UK.”

Next up on the Photonics Stage, was Francesca Alessandri, Quantum Communication Architect from Thales Alenia Space. She described the emerging sector of secure satellite-based optical links secured by quantum key distribution.

“QKD communications via satellite overcomes the limitations of fiber based communication because single photon level signals cannot be amplified,” she explained. But she also described challenges that need to be solved to progress space-based communications: “We need to implement a pointing, acquisition and tracking system with high accuracy and stability.”

“We need to improve communications efficiency using adaptive optics techniques and we need to optimize the SWAP factors of space-borne optical terminals for QKD for use on micro-satellite platforms.”