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01 Oct 2024
Manufacturing facility in Newton Aycliffe had been producing VCSELs for 3D sensing.
Coherent has sold its gallium arsenide (GaAs) wafer fabrication facility in the north of England to the UK government, for a reported £20 milllion.
The decision by the photonics giant, which had used the site to produce vertical cavity surface-emitting lasers (VCSELs) for 3D sensing devices inside iPhones, is part of a wider effort to streamline operations following the 2022 merger of II-VI and the original Coherent laser business.
Coherent CEO Jim Anderson commented: “Divesting the Newton Aycliffe plant is part of our effort to optimize our portfolio and streamline our operations, which allows us to focus our investment and capital on the areas of greatest long-term growth and profitability for the company.”
Octric Semiconductors
While the UK’s Ministry of Defence has now acquired the wafer fab, filings with the UK’s Companies House indicate that Ian Croston, who had managed the facility for II-VI and Coherent since 2021, will continue as general manager for a new company called Octric Semiconductors.
However, it is not yet clear whether the site - described as the only secure GaAs fab in the UK - will be producing optoelectronic devices, with the MoD stressing a focus on military applications.
“This strategic investment will ensure the facility is capable of producing gallium arsenide semiconductors as well as more powerful semiconductors in the future, which will include the latest technology,” it said.
GaAs devices can be used in a wide range of radio-frequency electronic applications, for example radar units, signal jammers, and electronic warfare, as well as optoelectronic uses like laser diodes and photodetectors.
Fab transactions
The 310,000 square-foot plant, located in Aycliffe Business Park, was originally built by chip maker Fujitsu in the early 1990s to fabricate silicon-based memory devices, at an estimated cost of $580 million.
When Fujitsu exited the site in 1998 it was initially taken on by GaAs radio-frequency device maker Filtronic, before ownership passed to RF Micro Devices.
Arizona-based Compound Photonics then acquired the wafer fab in 2013, to make laser diodes for applications in projection displays, before selling it to optical transceiver firm Kaiam for photonic integrated circuit (PIC) production in 2017.
Just three months later II‑VI bought the facility for $80 million, adding substantial extra capacity for VCSEL production at a time when it was looking to scale its output for 3D sensing chipsets subsequently deployed in millions of iPhones to enable Apple’s facial recognition security feature.
However, Apple is believed to have ended a key contract with Coherent earlier this year, while the photonics company has been looking to reduce its annual operating expenses by around $100 million - partly through the consolidation of its under-utilized facilities.
Speaking to investors in August, Anderson said he was making changes to the business in a bid to improve profit margins through operational streamlining, product pricing initiatives, and divestment of underperforming units.
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