September 30, 2024 /SemiMedia/ — The UK government has acquired a struggling wafer fab from U.S.-based Coherent for £20 million, securing domestic production of gallium arsenide (GaAs) semiconductors crucial for military technologies such as fighter jets. The facility, located in Newton Aycliffe, England, is the only secure UK-based semiconductor manufacturer, according to the government.

The acquisition will retain 100 skilled jobs at the 310,000-square-foot site, which was purchased by II-VI (now Coherent) in 2017 but faced closure amid a global review by the company. Coherent CEO Jim Anderson noted the sale is part of the company’s efforts to streamline operations and focus on areas of higher long-term profitability.

UK Defence Secretary John Healey visited the plant, underscoring its strategic importance. “This acquisition shows the government’s commitment to protecting the UK's defence supply chain and supporting critical jobs in the North East,” he said. The government aims to ensure the plant’s ability to produce GaAs semiconductors, alongside developing more advanced technologies for future applications.

The plant will be rebranded as Octric Semiconductors UK, with the government investing to secure its operations following a difficult year due to the loss of major contracts.

The announcement comes ahead of an investment summit in October, as the UK seeks to strengthen relationships with global trade partners and foster innovation.

This is the second notable semiconductor acquisition by the UK government in recent years, following the purchase of Newport Wafer Fab in Wales.