MoD steps in to buy chip-making plant for £20m

Defence Secretary John Healey (right) and Newton Aycliffe and Spennymoor MP Alan Strickland (also in green) toured the semiconductor facility's clean rooms

More than 100 jobs have been saved at a semiconductor factory after the government stepped in to buy the closure-threatened plant.

The Ministry of Defence (MoD) has paid £20m for the former Coherent chip-making facility at Newton Aycliffe, County Durham.

Coherent, which also makes chips used by the military, had considered closing the site after losing a big contract with iPhone maker Apple.

Defence Secretary John Healey said: "We simply can’t afford as a country to let this company get into the wrong hands or to go under."

During a visit of the site on Friday, he said the plant did something "no-one else in the UK does".

Mr Healey defended the move to bail out the factory, which will be renamed Octric Semiconductors UK, even though the former owner could be seen as failing.

Troubled site

"This is exactly what an active government should do," he said.

"It safeguards national security, it boosts British jobs, and I want to make sure that we grow the company and not just save it."

The purchase by the MoD is the latest chapter in a chequered history for the giant manufacturing facility.

It was opened by the Japanese company Fujitsu in 1991, creating 600 jobs and promising many hundreds more.

However, the plant was closed in 1998 with the loss of the entire workforce.

The company had struggled to keep up with advances in chip technology.

Since then it has been through multiple ownerships.