A UK wafer fab is facing the possibility of sale or closure as a result of Apple ending a supply deal, according to the Daily Telegraph.

The wafer fab is at Newton Aycliffe in County Durham in the north of England and is owned by materials, networking and laser technology firm Coherent Corp. (Saxonburg, Pennsylvania). The newspaper reported that local management have said a strategic review could result in the wafer fab being sold. The report also said that a last-time-buy notice had been issued to customers.

The wafer fab had been making compound semiconductor components for FaceID security feature provided on Apple iPhones, the Daily Telegraph reported. The factory has been operating under a number of different owners since it was opened by Queen Elizabeth II in 1991.

The facility laid of more than 100 staff in April 2023 but retained about 250 staff.

“Unfortunately the supply to the primary customer ceased at the end of financial year 2023. This places the ongoing viability of the business in doubt. A strategic review of the business is currently being undertaken with potential new technologies and/or sale of the business as options under consideration,” the company is quoted saying in a statement.

Restructuring
In the fourth fiscal quarter of 2023 – nine months ago – Coherent announced a restructuring plan that includes site consolidations and closures as well as the relocation and requalification of certain manufacturing facilities. In the most recent financial results the company said it still plans to close half of its compound semiconductor wafer fab and device manufacturing facilities and consolidate manufacturing in the most modern facilities.

It remains to be seen whether the UK government is prepared to get involved to broker a sale to an acceptable purchaser.

There are similarities here to recent developments at AMS-Osram and Newport Wafer Fab Ltd. AMS-Osram was investing heavily in microLED manufacturing in the expectation of supplying Apple who then cancelled the project (see Apple blow makes AMS-Osram re-assess microLED strategy). Newport Wafer Fab was a power semiconductor fab owned by Infineon which decided to consolidate its manufacturing and sold the fab in 2017. Since then a period of ownership by Nexperia was brought to end by the UK government forcing a sale to US-based Vishay Intertechnology Inc. (see Vishay to buy Newport fab for $117 million) on national security grounds.

The wafer fab at Newton Aycliffe was opened as a silicon DRAM wafer fab in 1991 by Fujitsu. It was bought by Filtonic in 1999 to make compound semiconductor RF circuits. It moved through the ownership of a number of smaller companies before being acquired by II-VI which has in turn become Coherent Corp.

 

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