This thesis reviews the history of the semiconductor industry during the period 1950 to 1985 and identifies the major factors governing its development. It also analyses the reasons for the failure of British manufacturing companies to develop on a more competitive scale. The development of the British semiconductor industry, almost from the start, took place within an environment dominated by large foreign multinational companies. Operating under conditions of technical lag and with increasing penetration of its markets, it concentrated, aided by funding from the Ministry of Defence, on producing specialised solid-state components for the much smaller military market. Because of its size, this market was not sufficiently large to initiate the pump-priming action which was such an important feature in bringing about the success of its American counterpart. Generous Government inducements, aimed at attracting multinational companies to British shores, did little to assist the development of the indigenous industry, which, underfunded, underprotected and increasingly restricted to niche markets by competitors, soon fell into relative decline. Direct Governmental assistance to the ailing commercial sector of the British semiconductor industry came too late substantially to affect the situation. Both inconsistency and lack of continuity in policy towards the industry, under successive Governments, did not improve the confidence of industrial management, nor encourage a more long-term outlook. It is argued within this thesis that the best chance of industrial success would have been to adopt a national policy towards the industry at an early stage, with substantial funding on a long-term basis, together with adequate import controls. The epilogue concludes that only within a European framework might it now be possible to build a semiconductor manufacturing industry, eventually capable of competing on equal terms with overseas rivals.