Brit bendy chip firm Pragmatic scores funding to boost production

Semiconductor bods get cash injection after threatening to quit UK over lack of government support

UK-based chipmaker Pragmatic Semiconductor has netted £182 million ($229 million) in finance to expand production, after threatening to quit the country entirely earlier this year over lack of government support.

The Cambridge-based biz, which specializes in flexible integrated circuit technology, said it will use the investment to build a third and fourth fabrication line at its Pragmatic Park facility in Durham in northeast England.

This funding round was led by investment managers M&G and UK Infrastructure Bank, a state-owned development bank backed by HM Treasury but operationally independent. It also saw participation from new investors including Northern Gritstone and MVolution Partners, plus existing investors Cambridge Innovation Capital and Prosperity7 Ventures.

Pragmatic manufactures flexible chips using thin-film transistor (TFT) technology and a silicon-free fabrication process. Its FlexIC products include sensors and RFID chips, but it also offers a foundry service that can take custom designs from tape-out to delivery in four weeks, the company claims. It has also produced more complex circuits, such as Arm microcontrollers.

The company said that more than 70 percent of the new funding is from UK investors, who it claims are attracted by the opportunities for Pragmatic's technology in new applications. Pragmatic reckons its flexible integrated circuits can replace mainstream silicon chips in a wide range of use cases in consumer, industrial and healthcare applications and beyond.

Chief executive David Moore hailed the Series D funding round as a testament to the opportunities for Pragmatic's flexible circuit technology.

"Our global customers value our ultra-thin and flexible form factor, our breakthrough low cost of customization and rapid production cycles, as well as the lower environmental footprint compared to silicon,” he said in a statement.

Scaling the company's manufacturing capacity at its 300mm wafer production facility in Durham will let it build hundreds of billions of chips worldwide over the coming decade, he added.

Pragmatic said it anticipates building at least eight manufacturing lines over the next five years, which it hopes will see the company adding 500 skilled jobs in both the North East and Cambridge.

But things weren't always so rosy. Earlier this year, Pragmatic was one of a handful of British chipmakers that was threatening to up sticks and relocate to the more favorable financing environment of the US, if the government here did not come up with a semiconductor strategy to support the home-grown chip industry.

"The ship has sailed for the UK to catch up on production of silicon-based semiconductors, but there is still scope for us to become a world leader in non-silicon alternatives," Pragmatic Founder and Executive Director Scott White told The Register at the time.

The long-awaited semiconductor strategy was finally announced in May, and was initially met by a lukewarm reaction to the £1 billion ($1.2 billion) in funding the government was prepared to stump up over the next decade, compared with the tens of billions the EU and US are investing.

More recently there has been praise for the UK government approach, with some experts saying that simply throwing cash at subsidizing massive new chip fabrication plants is not the answer, and focusing investment in key areas where British industry already has strengths makes more sense.

However, the government missed an opportunity with the recent Autumn Statement from the Chancellor of the Exchequer, the UK's finance minister, according to the Semiconductor Leadership Group (part of industry association TechWorks).

"The Chancellor's Autumn Statement was an opportunity for the government to show that it recognizes the challenges faced by the UK's semiconductor manufacturing sector and to propose meaningful interventions,” said the group's Chair Charles Sturman. However, the fiscal package they laid out offers little to support the growth and global success of the sector, he claimed.

"The government announced investment of £500 million ($629 million) to fund AI innovation centers and £4.5 billion ($5.6 billion) in manufacturing between 2025 and 2030 for zero-emission vehicles, battery technology, aerospace, life sciences and clean energy, but nothing specific for semiconductors,” Sturman complained. ®

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