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UK Acquires US Semiconductor Factory To Safeguard Defence Value Chain

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Aiming to secure military supply chains, the UK government has acquired a US semiconductor factory, renaming it Octric Semiconductors UK, and looks to preserve up to 100 jobs.

On Friday, the UK government revealed that it had acquired an essential semiconductor factory to address concerns that its impending closure could disrupt a vital supply chain for the country’s armed forces.

According to the government, the facility is located in Newton Aycliffe in northeast England. It is the only secure site in the UK, capable of manufacturing gallium arsenide chips used in various electronic devices.

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The factory has been acquired from the US firm Coherent Inc, and it will be renamed Octric Semiconductors UK, according to the Ministry of Defence (MoD). The purchase price was not disclosed, but a report by the Economic Times predicted from a source that it was approximately £20 million ($27 million). According to the ministry, the acquisition will help secure up to 100 jobs.

Noting that semiconductors are essential to the technology that the nation depends on presently, UK Defence Secretary John Healey stated that this move will be vital for enhancing military capabilities in the future.

The Telegraph reported in August that the factory’s future was at risk due to the termination of a contract with US tech giant Apple. Additionally, the Italian aerospace firm Leonardo was a customer of Coherent but had no pending orders with the company, according to the report.

The UK Government stated that over a trillion semiconductors are produced in the country annually, and the global semiconductor market is projected to reach a total value of $1 trillion by 2030.

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Shubha Mitra
Shubha Mitra
Shubha is a journalist at EFY. She is keenly interested in India's evolving electronics ecosystem. Her focus revolves around government policies, legislation, and public-private partnerships related to the industry.

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