'Huge potential' for 'critical' Newton Aycliffe factory

The Ministry of Defence (MOD) has acquired the Coherent Inc factory, saving the firm from closure fears and securing 100 jobs. 

Defence Secretary John Healey said the Government "couldn't afford to see this company go under or get into the wrong hands" - saying the site has "huge potential" and will bolster support for the armed forces. 

Now named Octric Semiconductors UK, the plant will be the only secure facility in the UK with the ability to manufacture gallium arsenide semiconductors. 

Semiconductors are essential for almost every electronic device - whether that's phones and computers or ventilators and power stations. 

But the types of specialist semiconductors manufactured by the Aycliffe site will be used in a number of military platforms, including to boost fighter jet capabilities.

It is also "critical" to the UK defence supply chain and exports, and can allow the military to fill the gaps to support their future needs.

100 jobs have been secured at the factory (Image: STUART BOULTON)

Speaking to The Northern Echo on a visit to the factory today (Friday, September 27), Mr Healey said: “This company does what no one else does. 

“It makes semiconductors for high end military electronics, and this country can't afford to see this company go under or get into the wrong hands. 


“So that's why I wanted to make sure the MOD stepped in not just to save the company, but to grow the company in future as well.”

Defence Secretary John Healey and Alan Strickland is the Labour MP for Newton Aycliffe and Spennymoor (Image: STUART BOULTON)

On the visit, the Defence Secretary said £20million pounds had been paid for the company but that its value to the nation “cannot be costed”. 

He said it was “essential to our national security” - and that the Government wants to “grow the company, not just save it”. 

He continued: “The potential is huge. We are buying the company today, we will invest in the future of this site and of the skills. 

The plant is 'essential' to national security (Image: STUART BOULTON)

“It's exactly what a good active government should do - seeing the strength of British industry, reinforcing that strength, and making sure that we can safeguard our national security at the same time.”

The building now occupied by Coherent, which was opened as Fujitsu by the late Queen in 1991, announced job losses at its factory last April after orders started to fall away. 

Queen Elizabeth II opened the £400m plant to huge royal fanfare. At the time it was the biggest single investment in the region since Nissan.

Reports in August suggested that Italian aerospace company Leonardo was among Coherent’s customers, alongside Apple, which had ceased orders.

Coherent was not thought to have any outstanding orders with Leonardo, according to the newspaper, but its sources suggested the plant may still be needed for future, unspecified programmes.

The acquiring of Coherent comes ahead of an 'Investment Summit' next month, which will see the Government reset relations with trading partners around the globe. 

It will also boost UK defence industrial capacity and exports, as the government intends to invest in the company over the coming years.

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This 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. 

Semiconductors also underpin future technologies, such as artificial intelligence, quantum and 6G.