A US semiconductor company, Coherent, is reportedly facing the closure or sale of its UK site after being dropped as a supplier by Apple.
British military projects could face disruption, as Coherent’s UK microchip plant, one of the country’s largest, has ceased taking new orders and is at risk of closure, according to the Telegraph.
Coherent, headquartered in Pennsylvania, operates a 310,000 square foot facility in Newton Aycliffe, Country Durham, UK. The company has halted orders at this site and indicated it may need to sell it after Apple ended its contract with Coherent. Earlier this year, Apple announced changes to its FaceID features in the upcoming iPhone, rendering Coherent’s chips obsolete. In May, Coherent UK acknowledged the termination of its supply to its “major customer” at the end of the 2023 financial year. The plant has already laid off numerous employees, and Apple’s decision has put the “ongoing viability of the business in doubt.”
One of the plant’s clients is Leonardo, an Italian defense giant that manufactures radar systems, electronic warfare systems, and helicopters for the UK. Coherent’s UK factory previously supplied chips for radar power amplifiers in Eurofighter Typhoon jets and other British defense equipment. According to the Leonardo website, the company produces approximately 60% of the avionics for the Typhoon.
The Telegraph cited a source stating that Leonardo currently has no outstanding orders for the factory, but the plant’s specialized nature might necessitate its services in the future.
“The factory’s closure threatens to reduce the UK’s domestic capabilities,” and could force Leonardo to seek supplies from other countries, 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.”