The future of a semiconductor factory in Newton Aycliffe, County Durham, has been safeguarded after the UK government stepped in to prevent its closure, saving more than 100 jobs.
The Ministry of Defence (MoD) purchased the facility for £20m, ensuring that its vital operations can continue.
Previously owned by Coherent, the factory manufactures semiconductors, including chips used in military equipment. It faced closure after losing a major contract with Apple, which prompted Coherent to consider shutting down the site.
During a visit to the factory on Friday (27th September), Defence Secretary John Healey highlighted the strategic importance of the plant and the necessity of the government’s intervention. He stated: “We simply can’t afford as a country to let this company get into the wrong hands or to go under.”
The site will be rebranded as Octric Semiconductors UK, and Healey noted that the plant provides a service that is unique within the UK semiconductor industry.
Defending the government’s involvement, Healey stressed: “This is exactly what an active government should do. “It safeguards national security, it boosts British jobs, and I want to make sure that we grow the company and not just save it.”
The MoD’s acquisition marks a new chapter for the factory, which has experienced a series of setbacks over the years. Initially opened by Japanese firm Fujitsu in 1991, the facility created 600 jobs and had ambitious plans for further growth. However, by 1998, it was forced to close, leading to the loss of its entire workforce, as the company struggled to stay ahead of evolving semiconductor technology.
Since then, the site has changed ownership multiple times, each transition accompanied by its own difficulties. With the recent government intervention, there is optimism that the factory can now move forward, contributing to the UK’s semiconductor capabilities and enhancing national defence infrastructure.
This intervention comes amid increasing awareness of the importance of maintaining domestic semiconductor production, particularly given the growing concerns around global supply chains and the geopolitical challenges surrounding the semiconductor industry.
“Divesting the Newton Aycliffe plant is part of our effort to optimise 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 for the company,” said Jim Anderson, CEO.
