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SMEs ‘should form cooperative’ to buy chips

Microchips are in short supply (pic: Sahand Babali)

Scotland’s small tech companies facing a shortage of microchips have been urged to form a co-operative to boost their purchasing power.

Dr Richard M Marshall, an Edinburgh-based independent technology expert, is also urging the government to consider bringing semiconductor manufacturing back to the UK.

He will tell delegates attending CENSIS’s seventh annual Technology Summit in Glasgow (29 September) that unless SMEs take collective action they risk being squeezed out of the market for vital electronic components.

This would also be a setback for the country’s economy, he says, and the government should look to reintroduce chip manufacturing.

“Over 99% of Scottish companies are SMEs and this puts them all at a distinct disadvantage when it comes to buying in international markets, in which there is a shortage of the products they need,” he said in a pre-summit statement.

Richard M Marshall: options

“We have recently seen cases of large US tech companies buying an entire year’s worth of servers, for instance, and small companies simply don’t have the money to compete.

“If our SMEs can’t access the products and components they need to build products and deliver services, then that calls into question whether Scotland as a nation can do those things as well.”

Dr Marshall, who is also a former Gartner analyst, will join hundreds of delegates at the summit, organised by CENSIS, Scotland’s innovation centre for sensing, imaging, and Internet of Things (IoT) technologies.

He said that creating a co-operative for Scottish manufacturers and tech companies to give them more purchasing power on the international stage would be a way to safeguard supplies.

“Another, longer-term option could be bringing more chip fabrication back to the UK or looking at more geographical diversification for globally important supply chains,” he said.

“Whatever the answer is, we need to start looking at alternatives rather than relying on the market structures in place prior to the Covid-19 pandemic.

“It’s a matter of national resilience, ensuring Scottish businesses have access to the key building blocks and components they require, ultimately making sure they and our economy are not left behind.”

Paul Winstanley, CEO of CENSIS, said: “Many of the companies we work with have told us about how difficult they are finding it in the current environment to get their hands on the semiconductors and other components that are the lifeblood of what they do. 

“We need to start exploring the options in front of us to create new supply chains that ensure continual access to what they need, even in exceptional circumstances like the period we have just been through.

“The formation of a cooperative would be a great starting point, and it is something we previously explored with Technology Scotland during the heights of the pandemic. 

“The CENSIS Technology Summit is the perfect forum for beginning further discussion, bringing together experts from across the country and further afield to address the challenge in front of us.

“I look forward to seeing what ideas developed on the day will be taken forward by the businesses, public sector services, and academic institutions present today.”

Alongside Richard Marshall, attendees will hear from keynote speaker Andy Stanford-Clark, IBM’s distinguished engineer for IoT and master inventor; South of Scotland Enterprise’s head of natural capital, Jayne Ashley; and Allan Cannon, CEO and founder of Scottish satellite start-up Krucial (previously R3-IoT). 

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