Australia urged to back national semiconductor roadmap

Semiconductor Sector Service Bureau has released a discussion paper on Australia's semiconductor industry to help inform the country's first National Semiconductor Roadmap.

The release comes as the sector's peak body warns Australia lacks a coordinated national semiconductor strategy, despite the industry generating close to AUD $1 billion in revenue and contributing AUD $820 million to the economy in 2025.

Deloitte Access Economics estimated the ecosystem supports about 5,790 full-time equivalent jobs through direct and indirect employment. Activity is concentrated in knowledge-intensive, application-linked areas including research and development, design, intellectual property, advanced materials, photovoltaics, photonics, quantum-related technologies, specialised devices and semiconductor-enabled products.

S3B, which describes itself as Australia's only industry hub for the semiconductor sector, was established three years ago with funding from the Office of the NSW Chief Scientist and Engineer. It supports the sector in New South Wales and nationally.

National focus

The discussion paper outlines consultation topics including Australia's strategic position, capability priorities, supply chains, international engagement, skills and workforce, infrastructure and investment, and government policy and coordination.

The roadmap is intended to be a 15-year, sector-led strategic plan to guide policy, investment and capability development. S3B is also seeking industry feedback through a survey.

Acting Director Matthew Worsman said the issue was becoming more urgent as other countries increased investment in the sector.

"The global economy is becoming more digital, automated and electrified, and semiconductor capability is becoming central to how nations build resilience, capture value and stay competitive. Australia is currently playing to selective strengths in the knowledge-intensive, design-led and application-linked parts of the value chain, rather than running a full-stack semiconductor economy," Worsman said.

"Other countries are investing significantly in this sector, and Australia needs to consider how it can secure its place in the global ecosystem. There is no coordinated national approach. S3B has released this discussion paper to spark conversations and gather input from across the sector, so together we can build a roadmap for an end-to-end value chain and make sure as a nation we're not left behind."

Semiconductors sit at the centre of technologies used in communications, energy, medicine, transport, defence, artificial intelligence, quantum systems and advanced manufacturing. The paper argues the sector matters not only for economic output, but also for resilience and national security.

Supply chain risk

Australia's domestic semiconductor manufacturing base remains limited, although the paper points to emerging investment in advanced packaging, photonic packaging, device assembly and prototyping infrastructure.

The sector also remains closely tied to overseas partners and facilities, with Australian organisations relying on links across the United States, Japan, South Korea, Taiwan and the European Union, while deepening engagement with Singapore, India and Vietnam.

"The sector will always rely on international partnerships, with ties across the United States, Japan, South Korea, Taiwan and the European Union, and deepening engagement with Singapore, India and Vietnam. Australia's dependence on offshore capabilities creates a strategic risk that genuinely needs more diversified and trusted supply-chain access. As nations make increasingly deliberate choices about where semiconductor capability is developed and scaled, Australia's ability to capture value and participate in future industries will depend on how effectively it connects its domestic strengths to international partners, markets and infrastructure," Worsman said.

The discussion paper argues Australia should focus on parts of the value chain where it already has depth, rather than try to replicate the semiconductor ecosystems of larger economies. It proposes more investment in translation infrastructure, stronger access to offshore fabrication, packaging and design pathways, and a deeper workforce pipeline.

Former Chief Scientist Dr Cathy Foley said the country had established strengths in the early stages of the semiconductor value chain but faced barriers in commercial scale-up.

"There's a missing middle, in infrastructure beyond research scale, in accessing global capability and capital, and in workforce depth at the mid-career, senior and production levels. These challenges are all connected. Together they decide whether ideas and prototypes can progress to deployable products, and whether we build lasting industrial capability and capture long-term value. It's great to see there is commercial advanced packaging capability being built at Bradfield, Western Sydney. But we still need a roadmap that prioritises the capabilities, investments and partnerships needed, while providing a pathway for how government and industry can work together to grow the sector and support economic resilience," Foley said.

Worsman said the sector now includes 180 organisations and remains under-recognised in the wider economy.

"The Australian semiconductor sector is 180 organisations strong with real but unrecognised opportunity for the economy. There are priority issues we need to tackle if we're going to grow what is a critical ecosystem, and one with genuine economic potential," he said.