On September 27, 2024, the UK government announced its acquisition of a semiconductor factory in Newton Aycliffe from Coherent Corp. (NYSE: COHR), a major player in materials and laser technology. This facility is the only secure site in Britain capable of producing gallium arsenide (GaAs) chips, which are critical for military applications, including fighter jet enhancements. The purchase, valued at approximately £20 million ($27 million), aims to safeguard the domestic semiconductor supply chain vital for national security.

Coherent's decision to sell the 310,000 square foot plant was influenced by its recent challenges, notably the loss of a significant contract with Apple, which jeopardized the factory's future. The facility, acquired by Coherent in 2017, faced operational risks as it struggled to maintain profitability without this key customer. The acquisition by the government, now renamed Octric Semiconductors UK, is set to secure around 100 jobs, reinforcing the UK's commitment to its defense production capabilities.

Defense Secretary John Healey highlighted the importance of semiconductors for modern military technology, stating, "This acquisition is a clear signal that our government will back British defense production." He emphasized the strategic necessity of maintaining a robust domestic supply chain for essential technologies.

This move comes amid rising global competition in the semiconductor industry, projected to reach a market size of $1 trillion by 2030. As the UK government focuses on strengthening its semiconductor sector, this acquisition underscores its recognition of the industry's strategic importance in both economic growth and national security.