Innovate UK opens a £15m grant call for chip and connectivity startups, closing 14 October

Innovate UK has opened a funding competition with up to £15 million allocated for UK-registered SMEs working on advanced connectivity technologies, semiconductors or AI hardware. Applications close at 11am on Wednesday 14 October 2026.

The competition, Investor Partnerships - ACT and Semiconductors, opened on 1 September. It is a joint call funded by the Department for Digital, Culture, Media and Sport and the Department for Business, Innovation, Science and Trade, and Innovate UK states that it is “targeted at growth oriented ACT and Semiconductor start-ups from seed to Series A”.

The defining condition is that the grant does not come on its own. Applicants must be invited to apply by an investor partner selected by Innovate UK, and that partner must have submitted an expression of interest directly to Innovate UK. “Without an EOI submitted by your named Investor Partner, your application will be viewed as ineligible,” the competition brief states.

How much, and on what terms

Award levels depend on the research category.

For industrial research projects, total project costs must be between £250,000 and £1 million, and Innovate UK will fund up to 70% of eligible project costs for micro or small organisations and up to 60% for medium-sized organisations. The minimum aligned investment led by the investor partner must be at least equal to the grant funding.

For experimental development projects, total costs must be between £500,000 and £2 million, with Innovate UK funding up to 45% for micro or small organisations and up to 35% for medium-sized ones. Here the aligned investment must be at least twice the grant funding.

Projects must run for between 6 and 18 months in either category, and must start on the first of a month. The aligned investment has to be completed through the issue of new shares or convertible debt. A project cannot start until the declared minimum aligned investment has been secured.

Who can apply

The competition is open to single applicants only. To apply, an organisation must be a UK-registered micro, small or medium-sized business, carry out its project work in the UK, intend to exploit the results from or in the UK, be invited to apply by its investor partner, and have discussed and agreed the proposal with that partner before submitting. An SME may submit only one application to this round.

Subcontractors are allowed and can be based anywhere in the UK. Overseas subcontractors require a detailed rationale and evidence of the UK contractors approached, and Innovate UK states that a cheaper cost is not a sufficient reason.

Funding decisions rest on three factors: innovation, assessed by independent assessors from the application; additionality, judged by the Investor Partnerships team on the grant’s effect in accelerating the innovation and leveraging the aligned investment; and traction, the likelihood of the investment completing within a reasonable timeframe. Applicants “must score strong across all three factors”. Examples of sufficient investment traction listed in the brief include an indicative offer from an investor partner, going through due diligence with one, or receiving a term sheet from an interested investor partner.

Scope and the dates that matter

Projects must sit in one of three themes: advanced connectivity technologies, semiconductors including AI hardware, or the convergence of the two for use in communication networks. Areas named under the semiconductor theme include novel compute hardware and AI accelerators, advanced semiconductor materials and device innovation, integrated circuit design and architecture, fabrication processes and equipment, power electronics and energy-efficient devices, sensors and MEMS, and photonics and optoelectronics. Projects that align with the goals of the UK’s AI Hardware Plan will be prioritised for funding.

Innovate UK is holding an online briefing at 11.30am on 7 September 2026, and is using Innovate UK Business Connect’s B2Match platform to arrange introductions between founders and investors. Applicants will be notified on 16 November 2026, and successful projects must start by 1 February 2027.

The call sits inside a larger commitment. The UK AI Hardware Plan, published on 8 June 2026, carries over £1.1 billion. That includes £120 million for a new AI Hardware Innovation Programme, £400 million towards next-generation chips for a national AI supercomputer, of which £150 million is an advance commitment to buy novel chips from startups and British firms, and up to £150 million from the British Business Bank into a fund led by Playground Global.

The need is documented. DSIT’s semiconductor sector study 2026 found that early-stage and fabless design businesses reported difficulty securing growth equity and grant funding for hardware-focused businesses, and that manufacturing companies cited scale-up capital as their primary growth constraint.