News: Microelectronics
27 September 2024
UK Government buys Coherent’s Newton Aycliffe fab to secure defence supply chain
Materials, networking and laser technology firm Coherent Corp of Saxonburg, PA, USA (formerly II-VI Inc before it acquired Coherent in July 2022) has sold its semiconductor fabrication plant in Aycliffe Business Park, Newton Aycliffe, County Durham, UK, which was acquired by II‑VI Inc in 2017.
“Divesting the Newton Aycliffe plant is part of our effort to optimize our portfolio and streamline our operations, which allows us to focus our investment and capital on the areas of greatest long-term growth and profitability,” says CEO Jim Anderson.
Covering 310,000ft2 of space (comprising a 100,000ft2 manufacturing area, including 50,000ft2 of Class 100 cleanroom), the fab was opened by Fujitsu in 1991, then bought by Filtronic Compound Semiconductors in 1999 then RF Micro Devices in 2008 then Compound Photonics in 2013, before being acquired by Kaiam Corp in 2017 and sold within months to II-VI. Coherent used the facility to make III-V-based RF microelectronic and optoelectronic devices for communications and aerospace & defence customers.
Coherent said in April 2023 that a decline in business demand had prompted a restructuring of the firm’s operations, with a focus on reducing costs, and that it would cut Newton Aycliffe staffing by more than 100 by end-May 2023.
The fab has been bought for a reported £20m by the UK Government’s Ministry of Defence, which aims to secure for the UK’s Armed Forces what it describes as “critical to the defence supply chain and major military programs and exports”, as “the only secure facility in the UK with the skills and capability to manufacture gallium arsenide (GaAs) semiconductors”. These are used in military platforms (including to boost fighter jet capabilities).
The acquisition should not only safeguard the future of the facility but also secure up to 100 skilled jobs in north-east England. The fab will be renamed Octric Semiconductors UK.
The announcement precedes the Investment Summit in October, in which UK government aims to reset relations with trading partners around the world.
The acquisition is expected to boost UK defence industrial capacity and exports, as the government intends to invest in the company over the coming years.
Semiconductors will be crucial in securing the UK’s future military’s capabilities, said Defence Secretary John Healey to staff while visiting the site. “This acquisition is a clear signal that our government will back British defence production. We’ll protect and grow our UK defence supply chain, supporting North East jobs, safeguarding crucial tech for our Armed Forces and boosting our national security,” he added.
The strategic investment should ensure that the facility is capable of producing GaAs semiconductors as well as more powerful semiconductors in the future, which will include the latest technology.
The UK government says that it recognizes the strategic importance of semiconductors as a critical technology for the UK’s future and a significant enabler of the government’s growth and clean energy missions. It adds that work has already started to implement best-practice governance to ensure appropriate financial oversight to secure future success.
Coherent cutting over 100 jobs at Newton Aycliffe UK plant by end-May
