The UK's first 12-inch wafer fab opens

Latest update time：2024-03-28

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British chipmaker Pragmatic Semiconductor has officially opened its newest manufacturing facility in Durham, just over a year after its chief executive threatened to move the company out of the country over a lack of government support for the chip industry.

Pragmatic claims its Pragmatic Park facility in Durham, northeast England, is the UK's first production facility to produce 300mm semiconductor wafers. The company said this will give it the ability to produce billions of flexible chips (FlexIC) per year.

Pragmatic is headquartered in Cambridge and its first factory was in Sedgefield, south of Durham.

Her Royal Highness the Princess Royal attended the official opening of the facility, where current CEO David Moore gave her a tour of the cleanroom and production facilities before unveiling a plaque to mark the occasion. Other attendees included customers, ecosystem partners, investors and government officials.

Moore said the opening marked an important milestone in the development of Pragmatic and the UK on the global semiconductor stage.

"I'm extremely proud of the team's accomplishments and our mission to deliver item-level intelligence to more than a trillion sustainably smart items over the next decade," he said in a statement.

Smart packaging is one of the use cases for the company's flexible chips, which are made using thin-film transistor (TFT) technology and silicon-free manufacturing processes. Other use cases include wearables, sensors and flexible controllers in consumer products as well as industrial and healthcare applications.

Pragmatic said its new factory can accommodate up to nine production lines. The company secured 182 million pounds ($229 million) in funding late last year to expand production, which it said at the time would be used to build third and fourth production lines at Pragmatic Park.

The funding round was led by investment management firm M&G and UK Infrastructure Bank, a state-owned development bank backed by the UK Treasury.

This optimistic picture is different from a year ago, when Pragmatic was one of several British chip startups threatening to relocate abroad due to the apparent lack of government support for the domestic semiconductor industry. In contrast, U.S. and EU authorities have pledged tens of billions of dollars in funding to their chipmakers.

"It has to make economic sense for a company like ours to continue operating and manufacturing here, and if there are greater potential economic benefits and government benefits abroad," Pragmatic's then-CEO Scott White said Support the plan, then relocation is the only smart business decision” time.

That support finally came last May, with the government's Semiconductor Strategy providing UK chipmakers with £1 billion ($1.24 billion) in funding over ten years, focusing on areas seen as the country's strengths - chip design, research and development and compound semiconductors.

The move was initially criticized as too little, too late, but was later praised by some as focusing on the right areas, although more investment would have been welcome.

Niranjan Sirdeshpande, global head of strategy at M&G Catalyst and a board member of Pragmatic, said: “The UK has an ecosystem that is very supportive of providing early-stage financing, but for businesses seeking later-stage capital this becomes challenging.”

Pragmatic said its new site will create 500 high-skilled jobs over the next five years and support the UK's tech ecosystem. It also claims that its manufacturing process uses less energy and water than silicon manufacturing and produces fewer carbon dioxide emissions.

British industry players call for more investment in chips

Techworks, the British technology industry association, said in early March that it hoped to see more support for the British semiconductor industry in the country's budget to help British chip companies better compete on the global stage.

While the mainstream media endlessly speculates about tax cuts, Techworks is calling on the Chancellor of the Exchequer, the UK’s finance minister, to address in the annual budget the lack of investment UK chip companies need to grow beyond their start-up phase.

The group claims that the UK has the lowest level of incentives for its semiconductor industry among the G7, meaning overseas operations are effectively subsidized to compete unfairly with British chip companies.

The country has a strong presence in research and innovation through universities and early-stage startups. However, Techworks said a lack of funding to support late-stage development of companies to expand scale and improve global competitiveness often results in promising businesses being snapped up by foreign investors and technology and jobs being lost abroad.

One of the measures Techworks would like to see is a change in capital expenditure rules to allow semiconductor companies to recoup more of their strategic investment spending. Currently, spending on R&D tax credits is capped at 25% of profits and is limited to new equipment.

There are also calls for stimulating investment through the establishment of matching funds or lead investor programs to support important upgrades to infrastructure and equipment, and for government agencies to guide financial markets to improve access to long-term capital so chip companies want to scale up.

Techworks chief executive Charles Sturman said UK chipmakers needed a level playing field to compete, which meant support and financing for the spending needed to stay competitive.

“The Chancellor’s Budget is an opportunity for the Government to demonstrate that it recognizes the challenges facing the UK semiconductor industry and is prepared to support this strategic sector, as demonstrated by the Government’s own strategy published last May,” he said.

The long-overdue semiconductor strategy promises 1 billion pounds ($1.26 billion) of funding over the next decade in areas seen as the country's strengths, such as chip design and intellectual property, research and development and compound semiconductors.

Many are disappointed when compared with the billions of dollars in subsidies and other incentives the United States and the European Union have poured into boosting the local semiconductor industry.

However, some voices, including Techworks' own Semiconductor Leadership Group, generally support the strategy as a tentative step in the right direction, while other experts say the UK is choosing to fight rather than simply move towards large-scale chips. An infusion of capital from manufacturing subsidies is the right thing to do.

Techworks said that while the UK is not trying to compete with high-volume chipmakers such as Far East TSMC, the UK has world-class companies exporting millions of chips targeting important new markets including automotive power electronics, 5G radio communications, photonics science, as well as MEMS (microelectromechanical systems) for sensors in areas such as life sciences, automotive industry and robotics.

In other words, the UK has a diverse semiconductor industry that, with the right government support, has the potential to be even more successful.

Original link

https://www.theregister.com/2024/03/27/pragmatic_opens_300mm_fab/

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