UK Wafer Fab at Risk of Sale or Closure, Report Warns

May 27, 2024

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The wafer fab located in Newton Aycliffe, County Durham, in the north of England is currently owned by Coherent Corp., a company specializing in materials, networking, and laser technology based in Saxonburg, Pennsylvania. Recent reports have indicated that local management is considering a strategic review that may lead to the potential sale of the wafer fab. Additionally, a last-time-buy notice has been issued to customers, signaling a significant development for the facility.

According to the Daily Telegraph, the wafer fab has been instrumental in producing compound semiconductor components used in the FaceID security feature found in Apple iPhones. The factory, which was inaugurated by Queen Elizabeth II in 1991, has changed hands multiple times over the years, operating under various owners.

In April 2023, the facility faced workforce reductions, with over 100 employees being laid off while approximately 250 staff members were retained. The company released a statement stating, "Unfortunately the supply to the primary customer ceased at the end of the financial year 2023, casting doubt on the ongoing viability of the business. A strategic review is currently underway, exploring potential new technologies and the sale of the business as viable options."

During the fourth fiscal quarter of 2023, Coherent announced a restructuring plan that includes site consolidations, closures, and the relocation and requalification of certain manufacturing facilities. The company plans to close half of its compound semiconductor wafer fab and device manufacturing facilities, opting to consolidate manufacturing operations in more modern facilities.

It remains uncertain whether the UK government will intervene to facilitate a sale to a suitable buyer. This situation draws parallels to recent events involving AMS-Osram and Newport Wafer Fab Ltd. AMS-Osram heavily invested in microLED manufacturing to supply Apple, only to have the project canceled. Similarly, Newport Wafer Fab, previously owned by Infineon, underwent ownership changes before being sold to Vishay Intertechnology Inc. due to national security concerns.

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