Microchip factory stoppage puts UK defense projects at risk – Telegraph

A US semiconductor company could be forced to close its UK site after being ditched by Apple as a supplier

The British military is bracing for supply disruptions, after one of the country’s biggest microchip plants ceased taking new orders, the Telegraph wrote on Tuesday.

Coherent, a US corporation headquartered in Pennsylvania, maintains a 29,000 square-meter site in Newton Aycliffe, Country Durham, UK.

The firm has said it could be forced to sell the facility after tech giant Apple dropped its contract with the business, the newspaper reported.

Apple announced earlier this year that it would be changing some of its FaceID features in its upcoming iPhone version, meaning that Coherent’s chips are no longer needed. 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, and the decision by Apple is “placing the ongoing viability of the business in doubt.”

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The plant’s customers include Italian defense giant Leonardo, which manufactures radar systems, electronic warfare systems and helicopters for the UK, Telegraph said. Coherent’s UK factory 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 its staff “continually monitor” military supply chains, “including in the semiconductor sector.”