The Next ARM
ARM-based designs underpin more than 325 billion devices worldwide
ARM stands as a defining example of the “Cambridge Phenomenon.” In the early 1980s, a group of highly skilled engineers working from a converted barn near the University of Cambridge developed a breakthrough concept: low-cost microprocessors designed to consume minimal power and generate very little heat.
What set ARM apart was its business model. Rather than manufacturing chips, the company focused entirely on designing chip architectures and licensing them to others. This approach proved transformative. ARM-based designs underpin more than 325 billion devices worldwide—despite the company never owning a leading-edge fabrication plant or relying on the scale of state subsidies seen in countries like the United States or South Korea.
That model has since reshaped the semiconductor industry. Many of today’s most advanced chip companies specialise in design, outsourcing manufacturing to dedicated foundries. For the UK, replicating ARM’s success offers a realistic path forward: investing in design excellence, compound semiconductors, and advanced packaging to create strategic leverage points in the global supply chain. Britain’s strength lies not in mass production, but in innovation and specialised technologies.
This thinking is reflected in UK government policy, which prioritises maintaining leadership in chip design and intellectual property. Rather than focusing on large-scale fabrication, the strategy positions design blueprints as the country’s key strategic asset in the semiconductor landscape.
One major area of opportunity is compound semiconductors. Unlike traditional silicon-based chips, these are made from combinations of elements such as gallium arsenide (GaAs) and gallium nitride (GaN). These materials offer superior performance in terms of electron mobility, power density, and efficiency, making them essential for applications like 5G communications, LEDs, electric vehicles, and high-performance electronics operating in extreme conditions.
The UK aims to become a global leader in this field, anchored by a growing compound semiconductor cluster in South Wales. If British-designed technologies become standard in areas such as electric vehicle charging or aerospace and defence systems, the UK could establish a position of influence comparable—within its niche—to other global leaders in memory or lithography.
Advanced packaging is another promising frontier. This involves integrating multiple chips—potentially made from different materials—into a single module that functions as one unit. Scotland has already developed expertise in this area, producing high-performance power modules using techniques such as silver sintering and 3D stacking, particularly for electric vehicles and demanding industrial environments.
Emerging materials also offer long-term potential. Ultra-wide-bandgap semiconductors could enable significant advances in power electronics, photonics, and quantum technologies. Initiatives such as Space Forge’s microgravity manufacturing experiments are exploring how to produce higher-quality semiconductor materials in space, potentially unlocking new levels of performance.
Importantly, the UK is not betting on a single technology. Its National Semiconductor Strategy spreads relatively modest public investment across research, design, and early-stage innovation, allowing market forces to determine which areas succeed.
This ecosystem is supported by talent development and startup infrastructure. The UK Centre for Doctoral Training in Semiconductor Skills at Swansea is helping to build a pipeline of highly skilled researchers, while initiatives like ChipStart and SiliconCatalyst.UK provide startups with tools, intellectual property, mentorship, and access to global manufacturing partners.
For the US and Europe, these capabilities should be seen as strategically valuable. While the UK is unlikely to become a large-scale manufacturing powerhouse, it can play a critical role as a hub for design and innovation—developing the technologies that underpin the global semiconductor ecosystem. In doing so, it strengthens the broader Western alliance and helps ensure that technological leadership remains distributed among trusted partners.
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