UK Government Acquires Factory to Boost Domestic Semiconductor Production

The British government has acquired a struggling semiconductor factory from the U.S. firm Coherent Inc. The purchase, worth £20 million, aims to secure domestic manufacturing of gallium arsenide semiconductors for military technology and safeguard 100 skilled jobs. The plant will be renamed Octric Semiconductors UK.

The British government has taken decisive action by acquiring a struggling semiconductor factory from the U.S. firm Coherent Inc., in a bid to secure domestic manufacture of gallium arsenide semiconductors. These semiconductors are essential for military technology, including fighter jets. The government announced on Friday that the Newton Aycliffe plant in northern England is the only secure domestic manufacturer of these semiconductors.

Priced at 20 million pounds ($27 million), the purchase aims to preserve 100 skilled jobs. Although it is uncommon for British governments to buy or run companies, the critical role of the semiconductor sector in the economy and national security has necessitated such an intervention. The sector is particularly crucial for chips used in digital and industrial devices.

This isn't the first time the state has intervened in the semiconductor industry. Three years ago, the government bought another semiconductor factory, Newport Wafer Fab, to prevent its sale to a Dutch firm owned by a Chinese company. The government emphasized the importance of semiconductors as a critical technology for the UK's future growth and clean energy missions. The Newton Aycliffe factory, which struggled over the past year due to losing commercial contracts, will be renamed Octric Semiconductors UK, with further investment planned.

(With inputs from agencies.)