UK chipmaker Pragmatic Semiconductor secures record £182m in government and private funding
UK's strategies on semiconductors and batteries become clearer
Cambridge-based Pragmatic Semiconductor has raised £182 million in a funding round led by the UK Infrastructure Bank and private equity firm M&G Investments.
The record investment aims to expand Pragmatic's production capacity in north-east England to meet rising demand.
The equity deal, the largest ever for a European semiconductor company, values Pragmatic, founded in 2010, at about £500 million.
The funding will support the construction of two additional 300mm wafer fabrication lines at the company's manufacturing facilities in Durham, with plans to construct at least eight fabrication lines over five years. Each line can produce billions of flexible integrated circuits (FlexICs) annually for smart packaging, sensors and other applications.
FlexICs are made with polymer substrates instead of silicon. This, claims Pragmatic, enables the production of thinner, cheaper and more sustainable chips compared with traditional methods.
Pragmatic CEO David Moore said: "This successful Series D round is a clear testament to the massive opportunity for our innovative technology to enable item-level intelligence in virtually any object on the planet"
He added: "This is a proof point of being able to be a UK company with UK talent, UK investors and building out semiconductor manufacturing in the north-east of England."
Government support crucial
Industry leaders and experts have long stressed the need for significant government investment to boost the UK's semiconductor capabilities.
In May, the government announced its 10-year £1 billion National Semiconductor Strategy to expand the domestic chip sector, mitigate the risk of supply chain disruptions, and protect national security.
This focus was welcomed by the industry, but it was noted the funds are tiny compared with the $52 billion in the USA's CHIPS Act, or €43 billion ($46.5 billion) in the EU Chips Act.
Rather than trying to compete with the likes of Taiwan in bulk chip production, the UK is concentrating on specialist areas.
An influential group of manufacturers and chip designers said that while the UK is well-placed to meet the specialist needs of AI, the drive for Net Zero, IoT and quantum computing, achieving this will require stronger collaboration between industry, government and finance over the long term.
Commenting on the Pragmatic announcement, John Flint, CEO of UK Infrastructure Bank, which invested £60 million, said: "Our investment in Pragmatic backs a British business to accelerate development of a first-of-a-kind technology which not only cuts the carbon emissions of semiconductor production, but which will drive growth in the local economy in the north-east."
The investment, 70% of which comes from UK sources, is forecast to create 500 highly skilled jobs in north-east England and Cambridge.
UK Battery Strategy
Last week, the Department for Business and Trade unveiled the UK Battery Strategy, setting out plans for the country to be "a world leader in sustainable battery design and manufacture, underpinned by a thriving battery innovation ecosystem".
The Strategy provides for £2 billion of new capital and R&D funding from 2025 to 2030, and includes £38 million to improve the UK Battery Industrialisation Centre (UKBIC) in Coventry, £12 million for a new Advanced Materials Battery Industrialisation Centre (AMBIC) in Coventry and County Durham, and £11 million for 20 competition winners developing battery technologies.
It was hailed by industry players as a step in the right direction, but the funding on offer was described as too little by some, and too focused on electric vehicles.
"The government's new battery strategy plays little heed to the growing role of battery energy storage systems (BESS) in keeping the lights on," said trade association Solar Energy UK.
Ben Nelmes, CEO of consultancy New Automotive, told Transport and Energy: "The government's battery strategy is a good first step, but it fails to match the scale of the money being spent by international competitors or the strength of the regulation being introduced in Europe or North America.
"Ministers will have to do better if they want to secure Britain's place as a major battery manufacturing nation."