Innovate UK has opened a £15 million Investor Partnerships competition for UK small and medium-sized companies developing semiconductors, AI hardware, advanced connectivity technologies, and products combining those fields.
Innovate UK, part of UK Research and Innovation, is using its Investor Partnerships model to combine grant support with private investment led or catalysed by selected investor partners. The competition opened on 1 September and closes at 11am on 14 October, with successful applicants due to be notified on 16 November.
Up to £15 million has been allocated to innovation projects, subject to sufficient high-quality applications. The call is jointly funded by the Department for Digital, Culture, Media and Sport and the Department for Business, Innovation, Science and Trade, and covers two technology areas in the UK’s industrial strategy: advanced connectivity technologies and semiconductors.
The competition is restricted to single UK-registered SME applicants. Project work must be carried out in the UK, applicants must intend to exploit the results from or in the UK, and each business must have been invited to apply by an approved investor partner after discussing and agreeing the proposal with that investor.
Industrial research projects must have total costs between £250,000 and £1 million, while experimental development projects must fall between £500,000 and £2 million. Both categories must run for between six and 18 months, and funded projects are expected to start by 1 February 2027.
The financing structure differs from a conventional stand-alone grant. Micro and small companies carrying out industrial research can receive grant funding for up to 70% of eligible project costs, with medium-sized businesses eligible for up to 60%; the minimum aligned private investment must be at least equal to the grant.
For experimental development, the grant ceiling falls to 45% of eligible costs for micro and small businesses and 35% for medium-sized applicants. The minimum aligned investment in that category must be at least twice the grant, increasing the private capital required before a project can proceed.
Innovate UK will assess projects on innovation, additionality, and investment traction. The investor must confirm the level of aligned investment, while the applicant has to demonstrate a route to market, scalability, and the potential to attract equity capital. Technical merit alone is therefore insufficient if the financing and commercial case remain too immature.
The semiconductor scope includes novel compute hardware and AI accelerators, advanced materials and devices, integrated-circuit design, fabrication processes and manufacturing equipment, power electronics, sensors and MEMS, photonics, and optoelectronics. It also covers semiconductor technologies underpinning data centre, edge, and embodied AI systems.
Advanced connectivity proposals can include terrestrial and non-terrestrial network integration, RF architectures and components, spectrum-efficiency technologies, sensing and positioning, resilient communications, adaptive antennas, advanced MIMO, and AI-enabled network design. A third theme covers projects that combine specialised semiconductor hardware with connectivity systems.
The funding model addresses the point at which technically credible deep-technology companies need capital for qualification, packaging, manufacturing development, customer trials, and commercial deployment. Requiring an investor commitment alongside the grant places part of the scale-up judgement with private capital providers as well as the public funding body.
Semiconductor capital requirements can rise quickly when projects move from design into fabrication, advanced packaging, specialist test, or manufacturing equipment. The competition explicitly excludes large capital infrastructure, so the £15 million pool is aimed at company and technology development rather than financing a new fabrication plant.
The call follows a separate £1 million Innovate UK manufacturing sensing pilot opened in late August, which also targets SMEs taking technical products towards industrial customers. The funding models differ, but both concentrate on the stage between proving a technology and building a repeatable commercial operation around it.
The semiconductor competition also contributes to the UK AI Hardware Plan, with priority areas extending from accelerators and photonic interconnects to memory, sensing, power electronics, and heterogeneous integration. Those technologies sit across the compute stack, from processing and memory through interconnects, power conversion, and physical sensing.
Applications close on 14 October, and companies cannot use the competition as a first approach to potential investors because an approved investor partner must invite the application. That requirement favours SMEs with investor engagement already under way and makes the grant an accelerator for an existing financing process rather than a substitute for one. For applicants, the timetable therefore compresses technical preparation, commercial evidence, and investor diligence into a relatively short application window.
