IN Brief:
- DSIT's updated study identifies 703 UK semiconductor companies, comprising 295 dedicated and 408 diversified businesses.
- Dedicated semiconductor companies generated an estimated £10.6bn revenue and £7.5bn GVA in 2025 and directly employed around 16,350 people.
- Eighty-three per cent of surveyed companies expect growth over three years, although technical skills, scale-up capital, and operating costs remain constraints.
The Department for Science, Innovation and Technology has identified 703 companies participating in the UK semiconductor sector, comprising 295 businesses classified as dedicated semiconductor companies and another 408 diversified companies with relevant activity. Its updated 2026 sector study estimates that dedicated businesses generated £10.6 billion in UK revenue and £7.5 billion in gross value added during 2025, providing a broader measure of an industry that remains strong in design and specialist technologies but economically concentrated among a relatively small number of larger companies.
The company count has increased from 623 in the baseline assessment, with the dedicated cohort rising from 210 to 295 while the diversified group has edged down from 413 to 408. Around 70% of dedicated companies are UK headquartered and 92% are SMEs. DSIT estimates that those dedicated businesses directly employ approximately 16,350 people and support as many as 32,550 jobs across the wider economy.
The economic figures require qualification. Semiconductor activity is not captured by a single Standard Industrial Classification code, so the study combines official, commercial, and web-derived information to identify businesses with demonstrable UK semiconductor activity. DSIT describes the resulting estimates as experimental rather than official statistics and says they are better used to assess the sector’s broad scale and composition than as precise values for individual companies.
Within those limits, the direction of travel is still useful. Estimated UK revenue among the dedicated companies appearing in both studies increased from £9.6 billion in 2022/23 to £10.3 billion in 2024/25. Adding newly identified dedicated businesses lifts the latest estimate to £10.6 billion. The comparable gross-value-added figures are less straightforward, although the expanded dedicated cohort produces an estimated total of £7.5 billion.
Economic activity is unevenly distributed. Large semiconductor companies are estimated to account for approximately 75% of dedicated-sector revenue and 61% of employment, compared with around 66% and 53% respectively in the baseline work. Revenue is divided roughly evenly between UK-headquartered and internationally headquartered businesses operating in Britain, illustrating the sector’s dependence on both domestic specialists and multinational semiconductor groups with UK design, engineering, manufacturing, or commercial operations.
Regional capability is similarly specialised. The study identifies twelve recognised clusters, with Cambridge, London, Bristol, and Southampton among centres associated with design strength, while South Wales, Scotland, and the North East provide greater manufacturing or materials depth. That distribution reflects the UK’s unusual position in the semiconductor supply chain: it has internationally significant capability in chip design, intellectual property, compound semiconductors, photonics, specialist materials, and equipment without the leading-edge silicon fabrication scale found in the largest Asian and US manufacturing regions.
The supply-chain analysis also shows where smaller companies are concentrated. Among SMEs assigned a detailed activity category, equipment and tools manufacturing represents the largest single segment at 29.8%, followed by fabless chip vendors and design services. Compute and telecommunications are the two most prominent target end-markets, while industrial and robotics and aerospace and defence also feature prominently among dedicated companies.
Investment has increased since the baseline assessment. Grants and fundraising across the original cohort reached £1.73 billion, an increase of 16%, while newly identified dedicated companies secured a further £400 million. Much of that activity is weighted towards design-led, seed-stage, and venture-backed businesses in the East of England, London, and the South East, reinforcing a familiar scale-up problem: semiconductor companies can establish technically credible designs with comparatively modest early funding before requiring much larger amounts of capital to move towards production.
Industry expectations remain positive. A survey of 94 semiconductor companies conducted in early 2026 found that 83% expect growth over the next three years, while 47% anticipate annual growth of at least 20%. The research also included 38 interviews with stakeholders across industry, academia, government, and investment, providing qualitative evidence alongside the company and financial datasets.
Respondents nevertheless continue to identify technical talent, scale-up finance, and UK operating costs as barriers, with energy singled out as a particular concern. Those constraints affect different parts of the sector unevenly. A fabless design company can add engineering headcount without building a wafer facility, while a materials producer, compound-semiconductor fab, packaging operation, or process-equipment manufacturer has a heavier requirement for energy, industrial premises, capital equipment, and skilled manufacturing labour.
The global backdrop makes those constraints more significant. The study puts worldwide semiconductor sales at $796 billion in 2025, 39% above 2022, driven primarily by AI compute. Semiconductors also underpin the UK’s priority growth sectors, including advanced manufacturing, digital technologies, clean energy, and defence, meaning domestic capability increasingly sits inside wider industrial-policy questions rather than remaining a concern for electronics businesses alone.
A count of 703 companies gives the UK a substantial semiconductor footprint, but the more revealing figures are the concentration of revenue, the dependence on later-stage capital, and the uneven distribution of manufacturing capability. With 83% of surveyed businesses expecting growth, the next constraint is less likely to be finding another semiconductor start-up than ensuring that technically successful companies can obtain the people, infrastructure, energy, and finance needed to expand without moving the industrial part of that growth elsewhere.
