The UK’s science minister has thrown his support behind a new scheme to award small grants to semiconductor firms in an apparent backtrack on remarks he gave earlier in the year.

The scheme, which was unveiled today, sees 16 projects winning a share of a £11.5m pot provided by Innovate UK in a bid to help drive innovation in the sector. That amounts to an average grant of just £720k per project.

Speaking at London Tech Week in June, Vallance told an audience of start-ups and investors that receiving support of as little as £1m would mean they were ‘in trouble’ and would ‘spend their lives’ trying to raise money.

Vallance said: “I still think we undercapitalise our start-ups and that really creates a problem.”

“When I was GSK’s head of R&D, I was amazed when I’d speak to people in the US about companies they were starting up and then I’d speak to people in the UK and [they’d] say: ‘It’s really brilliant, it’s a great start we’ve got a million pounds’ – I mean, shit, you’re in trouble and you’re going to spend your life now trying to raise money.”

But Lord Vallance said today the new scheme “offers a real opportunity to growth these firms into industry leaders, strengthening our £10bn sector and ensuring it drives economic growth.”

“Our support in these projects will promote critical breakthroughs such as more efficient medical devices that could significantly lower costs and faster manufacturing processes to improve productivity.”

Among the funded projects, receiving a share of £11.5 million, is Vector Photonics Limited in collaboration with the University of Glasgow, which aims to enhance the power and cost-effectiveness of blue light lasers in everyday technology by using gallium nitride, a high-performance material.

Another project, led by Quantum Advanced Solutions Ltd with the University of Cambridge, is developing advanced shortwave infrared (SWIR) sensors which improve vision in critical sectors like defence, by supporting surveillance in challenging conditions in low-visibility environments, such as during adverse weather conditions or atmospheric disturbances.

The funding comes as the G7 Semiconductors Point of Contact group kicks off with a stakeholder forum at major UK chip company Arm’s HQ in Cambridge, where member states and industry representatives are set to discuss issues affecting the industry, like supporting early-stage innovation and sustainability.

The UK semiconductor sector, which includes over 200 companies in research, design, and manufacturing, is valued at almost £10 billion and could grow up to £17 billion by 2030, according to a report by Perspective Economics.

Iain Mauchline Innovation Lead – Electronics, Sensors, and Photonics at Innovate UK, said: “It has been recognised that semiconductors are key enablers for the UK ambitions across all critical technology areas.

“Funding these diverse projects highlights the strengths and depth of the UK’s semiconductor ecosystem.”