MOD strengthens defence supply chain as it snaps up semiconductor factory

The Armed Forces have received a crucial boost to their supply chain after the Ministry of Defence acquired a key semiconductor factory in County Durham.

The facility in Newton Aycliffe is critical to both the UK's defence supply chain and exports, including fighter jet capabilities.

The acquisition of the site has also secured nearly 100 skilled jobs in the North East.

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Semiconductors are vitally important for the modern world, being an essential component for the functioning of almost every electronic device, from phones and computers to ventilators and power stations.

The importance of semiconductors to military applications means the technology can allow the Armed Forces to fill the gaps to support their future needs.

The Newton Aycliffe site is the only secure facility in the UK with the skills and capability to manufacture gallium arsenide semiconductors.

These types of specialist semiconductors are used in a number of military platforms, including those that boost the capabilities of the Royal Air Force and Royal Navy's fast jets.

Crucial to securing military capabilities

Defence Secretary John Healey visited the site and said: "Semiconductors are at the forefront of the technology we rely upon today, and will be crucial in securing our military’s capabilities for tomorrow.

"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.”

Mr Healey has said that the MOD has paid £20m to purchase the company, citing it as crucial for the UK's national security.

"We've paid around £20m for the company. Its value to this nation can’t be costed because no other company does what this company does. It’s essential to our national security.

"We simply can't afford as a country to let this company get into the wrong hands or to go under, so I wanted to make sure the MOD stepped in.

"I want to make sure that we can grow this company in the future. This is exactly what an active government should do.

"It safeguards national security, it boosts British jobs, and I want to make sure we grow the company not just save it."

The semiconductor factory in Newton Aycliffe was acquired from its previous parent company Coherent Inc and will be named Octric Semiconductors UK.

This strategic investment will ensure the facility is capable of producing gallium arsenide semiconductors as well as more powerful semiconductors in the future, which will include the latest technology.

More than one trillion semiconductors are manufactured each year, with the global semiconductor market forecast to reach a total market size of $1 trillion by 2030.