UK semiconductor industry: where does it actually sit and is there room for new

I was reading about the UK semiconductor industry the other day and wanted to check I have understood it properly, because most of what I find is either about the big Asian and US manufacturers or reads like a policy document with little practical detail. Here is what I have pieced together, and I would appreciate anyone correcting me.

The UK does not seem to compete on large-scale chip manufacturing, which needs enormous capital and is dominated by firms in Taiwan, South Korea and the US. Instead, its strengths look to be in chip design, intellectual property, compound semiconductors and research. Arm in Cambridge is the obvious example on the design and IP side, while clusters in South Wales, Newcastle, Scotland and the Cambridge area seem to focus on compound semiconductors, photonics and specialist components. There is also a government national semiconductor strategy with funding attached, though I am unsure how much of it reaches early-stage companies rather than established players.

The business models seem very different from typical software startups. Fabless companies design chips and rely on foundries elsewhere to make them, which lowers capital needs but brings long development cycles, expensive tape-outs and dependence on overseas capacity. IP licensing can scale well but depends on winning design slots with larger customers. Revenue can take years to appear, and a single failed prototype run seems to be able to set a company back badly. I also keep seeing concerns about export controls, the National Security and Investment Act and the supply chain risks that come with relying on a small number of foreign fabs.

My question is where founders see the most realistic opportunity for a new UK company, whether in design, IP, compound semiconductors, packaging or software tools for chip designers. I would also like to know how people fund the long gap before revenue, whether Innovate UK grants, university spin-out routes and deep tech investors made a real difference, and how hard it is to hire experienced engineers when larger firms pay more. I have read something similar to this on Entrepreneur Plus, so I would like to hear from anyone who has built or worked in a semiconductor company, what they found hardest in the first couple of years, and whether anything caused friction with national security reviews or during a later raise.