UK Wafer Fab in Danger of Sale or Closure, Report Warns

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 from local management suggest that a strategic review is being conducted, potentially leading to the sale of the wafer fab. Additionally, customers have been issued a last-time-buy notice, indicating significant changes on the horizon.

The wafer fab has been instrumental in producing compound semiconductor components for the FaceID security feature found in Apple iPhones, as reported by the Daily Telegraph. Since its inauguration by Queen Elizabeth II in 1991, the factory has changed hands multiple times, operating under various owners throughout the years.

Despite recent challenges, including laying off over 100 staff members in April 2023, the facility has managed to retain approximately 250 employees. However, the discontinuation of supply to the primary customer at the end of the 2023 financial year has cast uncertainty on the future viability of the business. In response, the company released a statement indicating that a strategic review is underway, exploring new technologies and potential sale of the business as viable options.

In the fourth fiscal quarter of 2023, Coherent announced a restructuring plan that involves site consolidations, closures, and the relocation of certain manufacturing facilities. The company plans to close half of its compound semiconductor wafer fab and device manufacturing facilities, opting to consolidate operations in more modern facilities. The evolving landscape of the semiconductor industry is prompting companies to adapt and streamline their operations to remain competitive.

As discussions regarding the potential sale of the wafer fab progress, there is speculation about the involvement of the UK government in facilitating the process and ensuring a suitable buyer is identified. Recent industry developments, such as those involving AMS-Osram and Newport Wafer Fab Ltd., highlight the complexities and challenges faced by semiconductor manufacturers in a rapidly changing market.