The UK government has acquired a semiconductor fab in the English town of Newton Aycliffe, County Durham.

The facility is the only one in the UK with the skills and capabilities to manufacture gallium arsenide semiconductors for use in military applications. According to the government, the acquisition will also support up to 100 skilled jobs in the region.

Gallium arsenide has a number of electronic properties that make it superior to silicon as a semiconductor material, namely higher saturated electron velocity and higher electron mobility which allows transistors made of the mineral to function at higher frequencies.

Devices made with gallium arsenide are also less prone to overheating making it particularly favorable for the manufacturing of satellite circuitry and outer space electronics.

The factory was acquired by the government from Coherent Inc. and the new venture will be known as Octric Semiconductors UK.

“Semiconductors are at the forefront of the technology we rely upon today, and will be crucial in securing our military’s capabilities for tomorrow,” said UK defence secretary John Healey. “This acquisition is a clear signal that our government will back British defense production. We’ll protect and grow our UK defense supply chain, supporting north east jobs, safeguarding crucial tech for our armed forces and boosting our national security.”

The acquisition by the UK’s new Labour government appears to have gone a lot more smoothly than the former Conservative administration’s handling of a chip fab sale.

In March 2024, the then government finally cleared US electronics company Vishay’s takeover of Newport Wafer Fab - the UK’s largest semiconductor manufacturing site - following a tumultuous couple of years.

Newport Wafer Fab, which employs more than 400 people, was initially bought by Dutch technology company Nexperia in July 2021. However, because Nexperia is a subsidiary of Shanghai-listed Wingtech, the UK government forced the firm to sell its 86 percent stake in the factory due to concerns that China could undermine the country’s semiconductor production capabilities.

The plant was then bought by Vishay in November 2023 for a reported £142 million ($177m), but the deal couldn’t be finalized until the Cabinet Office had cleared the purchase on national security grounds, something which didn’t happen until March 2024.