UK grapples with diversifying telecom supply chains

The draft Telecom Security Bill, which was published this week, enshrines the exclusion of equipment from Chinese vendors Huawei and ZTE from UK 5G telecom networks, and calls for supply chain diversification to prevent reliance on one or two suppliers.

The bill is based upon the findings of a two-year security review of UK telecom supply chains. If passed, which appears likely, it will require operators to completely remove equipment from "high risk" vendors, notably Huawei and ZTE, from UK 5G networks by 2027. It will also tighten security standards and potentially impose penalties on operators that fail to meet them.

The challenge faced by the telecom industry in building out and monetising 5G networks and services in a period of constrained budgets is enormous. And with only two other large 5G telecom vendors in the world, Ericsson and Nokia, diversification would require high levels of co-operation within the industry.

"All semiconductor companies in the UK face the same challenge — there are no large UK-based OEMS [original equipment makers] remaining to partner with. And large and risky upfront investments are required before we can generate revenue. We are not suggesting that the UK government give us $10bn like China gave to Huawei, but a little bit of that would be a very big help to manage this risk," said Henry Nurser, chief business development officer of 5G millimetre wave technology developer Blu Wireless, at a conference organised by industry association TechUK on 24 November.

Next generation communications will need spectrum across all bands — low-band (sub-1 GHz) for widespread coverage; mid-band (1-6 GHz), which provides a balance of coverage, capacity and performance; and the most technically challenging millimetre-wave (above 25 GHz and moving to >150GHz), needed to achieve multi-gigabyte data rates.

"In terms of development, there are some parallels between the telecom industry today and the computer industry back in the 1980s," strategic development director of the UK-funded Compound Semiconductor Applications Catapult Andy Sellars said. "Back then, the computer industry adopted open standards, which led to personal computers that increased innovation, drove down costs and created large communities that were able to program them. Open standards can lead to open products that people can really do stuff with — that is the key factor for diversification," he said.

New materials

Next generation networks will require new materials such as compound semiconductors — chip wafers made from a combination of different electronic metals, not just silicon, to create enhanced properties, such as greater speed and light emitting and detecting properties.

Examples include gallium arsenide, gallium nitride, silicon carbide and indium phosphide. The supply chain for compound semiconductors is less mature than for silicon, which means there are more opportunities in terms of supply diversification and security, although the supply of raw materials — ores and metals — is dominated by Asia-Pacific.

"There are also lessons to be learned from developments in other sectors like electric vehicles (EVs)," Sellars said. "Catapult has initiated over £100mn ($1.33mn) of projects, mostly helping tier-1 automotive companies transition from internal combustion engines to electric propulsion. These projects built an entire supply chain in the UK from chip manufacture to production of the power module that goes into an EV. A similar approach could potentially be adopted here," he said.

By Caroline Messecar