The UK’s telecoms market is thriving, but understanding how the ecosystem is innovating can be difficult, especially considering the rapid advancements in academia. UKTIN has created a series of Market Research Insight papers to delve into the telecom subsectors. The fourth report has just been published, focusing on semiconductors in telecoms.
The UK is a global telecoms leader: the country’s telecoms and semiconductor sectors possess strengths in high-frequency electronics research, niche markets requiring complex engineering, and advanced materials science, owing to the country’s world-class research institutions and expertise in emerging technologies like wide band gap materials.
Yet the sector still faces significant challenges, particularly in scaling semiconductor manufacturing and bridging the gap between academia and industry. Despite this, the UK has the potential to strengthen its telecoms sector and expand its global semiconductor presence: the demand for high-speed Internet is growing, and the rise in streaming services provides opportunities for UK telecom companies to upgrade their infrastructure and explore new markets.
This UKTIN report summarises semiconductor-related research, development, and innovation (R&D&I) activities within the UK telecoms sector. It is designed to offer a non-technical perspective on the current state of R&D&I efforts in this critical area.
Semiconductors are, of course, used by multiple parts of the telecom industry, but this report focuses specifically on projects with a clear link to telecom applications. However, it also refers to closely related technologies such as photonics and radio-frequency engineering and considers some overlapping domains beyond pure telecoms applications, such as military communications.
"It's important to recognise both the fundamental links between semiconductor research and advances in telecoms, and the strength in depth of the UK academic and commercial semiconductor R&D base. The UK has a real chance to build on advanced communication technologies if properly supported through skills development and targeted long-term R&D funding," says Joe Gannicliffe, Head of RF and Photonics at CSA Catapult.
Report highlights
The report focuses on qualitative and quantitative data on topics of interest to the UK telecoms community and the UKTIN Semiconductors Expert Working Group. Other references include market dynamics, technological trends and the examination of government publications. The research was supported by the UKTIN R&D AI discovery tool.
Attracting customers: The rapid evolution of music and video consumption, driven by the double-digit annual growth of streaming services and high-definition content, offers a great opportunity for the UK telecoms sector. As consumers demand faster speeds and greater bandwidth – global Internet bandwidth rose by 22% in 2024 – to support the operation of these services, telecom companies can capitalise by upgrading their infrastructure to offer enhanced services. By doing so, UK telecom providers can attract new customers, increase revenues, and strengthen their role as essential players in the digital entertainment ecosystem.
Global footprint: The global semiconductor shortage presents a unique opportunity for UK-based telecoms companies to expand their global footprint. Global supply chains need diversified and reliable sources of semiconductors, and UK companies can explore new partnerships, invest in domestic production, or even acquire international businesses. These expansion strategies would enable UK firms to play a more prominent role in the global semiconductor market, strengthening the UK telecoms sector’s position on the world stage.
Funding: Access to adequate funding, compared to the US and some European countries, is seen as a threat to the ability of UK companies to invest in cutting-edge technology. The UK has fewer large-scale venture capital options and government-backed funding initiatives to foster innovation and start-ups. Some UK telecom companies are therefore considering opening subsidiaries in EU countries or, in some cases, relocating their headquarters; this could lead to a loss of jobs, tax revenue, and innovative capacity within the UK. The trend of UK telecom companies being acquired by US firms also poses a threat, and some companies are setting up production facilities in other countries with more favourable immigration policies.
New and growing areas of application: Satellite and optical wireless communications were mentioned as applications or areas of growing interest for the semiconductor industry.
Efficiency: While 5G promises exceptional connectivity speeds, its implementation faces significant challenges, especially with mmWave technology’s limitations in cost, range, and indoor performance. The rise of compound semiconductors like gallium nitride and indium phosphide offers promising alternatives to traditional silicon, particularly in niche applications requiring enhanced energy efficiency and performance. As the industry progresses towards smaller, faster, and more efficient components, these emerging technologies and materials will be crucial in overcoming the limitations of current technologies and driving the next wave of advancements in telecommunications.
Access the report in full here.
