As the UK government fights for a foothold in the global AI sector, it would do well to remember how vital the semiconductor industry is to the technology (and all electronic devices).   

There have been signs from the government that it will fight to establish a leading position for Britain’s semiconductor sector, such as in the national strategy unveiled in 2023. But the global race will present fierce competition. 

While Britain has been blessed with tech talent needed to advance semiconductor research and build pioneering businesses, the tech sector is overwhelmingly dependent on chip imports from overseas, predominantly from the US and Taiwan. 

Nonetheless, the UK has a small but significant chip manufacturing capability, is and has been the home of some of the most important and successful designers of instruction sets in the world.

Here are Britain’s biggest semiconductor companies. 

(Valuations are based on stock exchange or Dealroom data)  

Arm 

Valuation: $165.7bn 

Not only Britain’s biggest semiconductor company, Arm holds the distinct honour of being the most valuable technology company., Though it is majority-owned by Japanese conglomerate SoftBank and has many staff in California, Arm remains headquartered in Cambridge. 

And it’s not surprising Arm has become so valuable, Pretty much anyone who has a smart phone, laptop or e-reader has used chips based on the company’s architectural designs. It also didn’t hurt Arm’s valuation when the world’s wealthiest investors started pumping billions into AI technologies that rely on its chip designs. 

Its 2023 IPO on the Nasdaq provided a much-needed boost to the otherwise muted period for the public markets. 

Until now Arm has licensed its chip designs to other semiconductor companies – but now the firm is looking to sell chips of its own, in signs it is prepared to take on its big US rivals. 

Read more: How Arm became Britain’s most successful tech company 

Renesas Design UK (Dialog Semiconductor) 

Valuation: $5.9bn 

Reading– headquartered Renesas Design UK, formerly Dialog Semiconductor, has changed hands more than a few times.  

Founded as a European arm of the US group International Microelectronic Products, the company was acquired by Daimler AG, became a standalone company, listed on the Frankfurt Stock Exchange and in 2021 was bought by Japan’s Reneas Electronics.   

The company still operates out of its UK base under the ownership of Reneas. The company’s mixed-signal integrated circuits have been used in phones, tablets, automobiles and more. 

Pragmatic Semiconductor 

Valuation: $1.3bn   

Pragmatic Semiconductor is one of the last of a (for now) dying breed, a large British semiconductor company that has not been acquired by overseas buyers. 

Based in Cambridge with a manufacturing facility in County Durham opened last year by Princess Anne, the microchip maker received that largest-ever venture capital investment for a European semiconductor company in late 2023, raising £162m for its Series D round. 

Imagination Technologies  

Valuation: $726m 

Returning to UK-headquartered chip companies with international owners, Imagination Technologies 2017 acquisition by Canyon Bridge – a Beijing-based private equity firm with ties to the Chinese government – was so controversial its executives were summoned to appear before the Foreign Affairs Select Committee. 

Imagination’s primary business is in designing and licensing GPUs and neural network accelerators for AI processing. Amid the row over its Chinese ownership, company CEO Simon Beresford-Wylie announced in December 2024 that he would step down.

Graphcore  

Valuation: $600m 

One of Britain’s younger semiconductor companies, Graphcore was founded in 2016 by Simon Knowles and Nigel Toon two veterans of Bristol-based chipmaker XMOS (see below). The company specialises in processors designed for AI and machine learning. 

Last year, Arm-owner SoftBank agreed a deal to acquire Graphcore for $500m, bolstering the company’s AI capabilities, highly valued by CEO Masayoshi Son. Under SoftBank’s ownership, it’s not clear to what extent Graphcore will remain a distinct entity, though it is important to note the acquisition still needs to pass the scrutiny of the National Security and Investment Act. 

Paragraf    

Valuation: $360m 

Launched in 2017, Paragraf is a pioneer of the production of graphene-based electronics. The company developed a novel method of building graphene directly on semiconductor wafers which addressed a major hurdle in the incorporation of graphene into electronics. 

The Cambridge-based firm has been an active voice in the UK’s semiconductor industry, with its CEO Simon Thomas criticising the National Semiconductor Strategy on the UKTN podcast in 2023. 

FTDI

Valuation: $300m (estimation)

Based in Scotland, FTDI was founded in 1992 as a specialist in USB bridging solutions. The majority of the Glasgow-headquartered firm is owned by the Chinese-registered Future Technology Devices International.

In late 2024, the British government ordered the Chinese firm to sell the entirety of its 80.2% stake in FTDI under national security concerns. This decision was appealed but a High Court Judge ruled this week in favour of the British government’s decision.

IQE  

Valuation: $234m 

Cardiff-based and listed on London’s AIM, IQE manufactures expitaxial wafers, the foundational structure used to make semiconductors.  

IQE recently saw a 10% share price surge after announcing a partnership with Californian group Quintessent to develop quantum dot wafer supply chains for AI optical interconnects, which the company said was “critical innovation for future AI infrastructure”.   

Cambridge GaN Devices   

Valuation: $192m 

Cambridge GaN Devices specialises in developing semiconductors made with gallium nitride (GaN), a material which research suggests is better than silicon for electronics chips due to its greater efficiency, switching speeds and thermal conductivity. 

CGD designs, develops and commercialises GaN transistors used for electric vehicles, data centres, renewable energy infrastructure and industrial equipment. This week, the firm secured a £25.4m Series C round. 

Salience Labs 

Valuation: $180m   

Specialising in photonic chips – which use light to process information – Oxford’s Salience Labs is attempting to build ultra-fast processing solutions that would support the underlying infrastructure for AI. 

The company is an infant compared with much of the rest of the list, having been founded in 2021, Salience Labs was formed as a joint spinout from the University of Oxford and the University of Münster.   

Vishay Newport

Valuation: $177m (acquisition)

Based in south Wales, Vishay Newport is known as much for the dramatic events of its various acquisitions as it is for its actual product.

The site where it’s based, a semiconductor manufacturing facility, has been making electronics components since the 1980s. The facilities have been bought and sold a handful of times including in 1989, 1999, 2002, 2015 and beyond.

In 2017 Newport Wafer Fab was formed after the site was bought by Neptune 6. Newport Wafer Fab was sold to Nexperia – a Chinese-owned Dutch company – in 2021 in a deal that then business secretary Kwasi Kwarteng saw no issue with.

After reports of the new owner’s connection to the Chinese state, former prime minister Boris Johnson launched a security review that forced it to sell to US firm Vishay.

XMOS 

Valuation: $114m   

Backed by the likes of Amadeus Capital, Bosch and Huawei, Bristol’s XMOS develops microcontrollers for embedded systems and, like many of its peers, has recently focused on growth in the AI market.

XMOS’s technology is particularly useful for voice interface products – tech with voice controls. 

Ensilica

Valuation: $57m

AIM-listed Ensilica has seen better days. The company, which specialises in application-specific integrated circuits, currently has a share price 60% less than its peak in January 2023.

In November 2024, it warned shareholders it would not be able to continue trading for another 12 months without additional funding. The group received a much-needed boost earlier this month, however, after securing a £10m contract with the UK Space Agency.