UK Firms Poised to Capture Significant Share of Growing Global AI Chip Market
By 2033, the global AI chip market is projected to reach $700 billion annually, surpassing the current semiconductor market in size. The UK is positioned to capture up to 5% of this global AI chip demand, representing approximately $35 billion in new revenue and creating thousands of high-paying jobs.
The UK’s competitive advantage stems from its world-class chip-design heritage, underpinned by entities such as Arm in Cambridge, which designs over 90% of the chips powering phones and tablets. Strengths also include leading universities and AI research pioneer DeepMind. The 5% market share target is described as a conservative yet achievable ambition for the UK.
UK strategy focuses on specialized AI chip applications in fields such as robotics, factory automation, medical devices, and autonomous vehicles, rather than competing directly with dominant players like Nvidia in datacenter compute.
To support this growth, proposed government actions include doubling the chip-design workforce from 12,000 to 24,000 within a decade and recruiting around 1,500 new students annually through bursaries and financial aid. Policy measures suggested involve the use of sovereign AI funds, the British Business Bank, the National Wealth Fund, and a 'buy British' mandate by the Ministry of Defence.
Strategically, the UK aims to deepen its relationship with the US to gain access to leading US chip manufacturers and advanced sub-3 nanometre fabrication technologies. Building robust supply chains with US partners is a critical part of this plan. In the global context, export controls limiting China’s access to advanced manufacturing over the next decade reinforce the US’s role as a key player and create opportunities for the UK as a design ally.
