Overlooked industry could unlock billions for Australia

Semiconductors are the building blocks for computer chips, powering everything between critical infrastructure, everyday goods and the artificial intelligence revolution.

The bureau uncovered several Australian companies already doing "world-competitive stuff" with very little support during its 18 months of research, chair David Skellern said.

"Those capabilities are what Australia needs to actually pick up its productivity levels," Dr Skellern told AAP.

"(The plan seeks to ensure) we have the tech, the products and services that are needed to keep us at the forefront of development," he said.

There is a sense within the industry its potential, and importance, has been overlooked by investors and lawmakers.

But failure to ensure preparedness would leave critical industries including health, agriculture and defence - underpinned by computing hardware - exposed to international disruptions.

Australia does not need to become entirely self-reliant in chip manufacturing, Dr Skellern said. No nation is.

But the roadmap points to expanding the fields in which the nation's engineers already excel.

They include harnessing Australia's critical minerals, researching emerging technologies, advanced chip manufacture and chip design.

Deloitte modelling commissioned by S3B showed industry and government faced a $20 billion choice.

Decisions taken in line with those of comparable economies could see domestic semiconductor industry triple output by 2040.

Associated advancements would deliver a $5.3 billion boost for the nation's economy.

Constraints on the industry left unaddressed could cost the economy about $14.7 billion by contrast.

The bureau is setting five priorities for growth: national co-ordination, workforce development, investment, commercialisation and strategic infrastructure.

Importantly, the government needed to recognise the opportunity available, Mr Skellern said.

"(They must) provide the policy environments, the strategic investment that gives the long-term confidence enabling companies and universities to get on with the job," he said.

One key area to target would be the critical lack of industry talent, he added.

Hardware jobs declined over the past two decades as investment in computing hardware ceded to the software boom, and further COVID-era student shortages only worsened the skills deficits.

The non-profit bureau also identified a lack of national co-ordination and funding cliffs between research and commercial scaling as key barriers for the 200 stakeholders consulted.

"One of the big things we need to do now is we need government to accept that semiconductors need to be made a priority," Mr Skellern said.

A spokesperson for Industry and Innovation Minister Tim Ayres said the federal government understood the industry's importance, pointing to about $45 million in investments under the National Reconstruction Fund."The government recognises the role semiconductors have to play in Australia across advanced manufacturing and emerging technologies including AI and quantum," they said.