Microchip factory stoppage puts UK defense projects at risk - Telegraph

US semiconductor company could reportedly face the closure or sale of its UK site after being ditched by Apple as a supplier

British military projects could face disruption, after one of the country’s biggest microchip plants has ceased taking new orders and is at risk of closure, the Telegraph wrote on Tuesday.

Coherent, a US corporation headquartered in Pennsylvania, maintains a roughly 310,000 square feet (29,000 square meters) site in Newton Aycliffe, Country Durham, UK.

The firm has stopped taking orders at its UK factory, and said it could be forced to sell the site after electronics giant Apple dropped its contract with the business, the newspaper explained. The tech giant announced earlier this year it would be changing some of its FaceID features in its upcoming iPhone version, thus Coherent’s chips are not needed anymore. Coherent UK had announced in May that its supply to its “major customer” ceased at the end of the 2023 financial year. The plant has already laid off hundreds of employees, with the decision by Apple “placing the ongoing viability of the business in doubt.”

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One of the plant’s customers includes Italian defense giant Leonardo, which manufactures radar systems, electronic warfare systems and helicopters for the UK, Telegraph said. Coherent’s UK factory had previously supplied chips for radar power amplifiers in Eurofighter Typhoon jets, as well as other British defense hardware. According to the Leonardo website, the company produces some 60% of the avionics for the Typhoon.

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The Italian corporation currently has no outstanding orders for the factory, the Telegraph quoted a source, adding that given the plant’s specialization, they may be needed in the future.

“The factory’s closure threatens to reduce the UK’s domestic capabilities,” and could make Leonardo turn to other countries for supplies, the newspaper wrote. “It would represent a blow to the UK at a time when the Government is seeking to build up the domestic industry for making semiconductors,” the key tech at the foundation of producing everything from smartphones to the UK’s high-precision missiles, Telegraph said.

The UK Defense Ministry stated on Monday that they “continually monitor” their supply chains, “including in the semiconductor sector.”