British Innovation Fund Milestone: Pragmatic Semiconductor’s Journey to UK Tech Manufacturing Dominance

December 12, 2023

BY Alexander Kalis

The United Kingdom’s semiconductor industry is on the brink of a transformation, thanks to a £182 million financing deal that has placed Pragmatic Semiconductor, a Cambridge-based manufacturer of flexible circuits, at the forefront of the nation’s tech manufacturing landscape. This landmark funding sets Pragmatic on a trajectory to become the UK’s largest semiconductor supplier by volume, surpassing Newport Wafer Fab in Wales.

Pragmatic Semiconductor specialises in the development and production of flexible integrated circuits, utilising polymer substrates instead of silicon to create chips for innovative smart and digital packaging applications. These chips enable tracking and tracing of goods throughout the supply chain, revolutionising industries.

The equity deal values Pragmatic at approximately £500 million, with the majority of the funding coming from UK-based investors, including M&G Investments, the UK Infrastructure Bank, Northern Gritstone, Latitude, British Patient Capital, and Prosperity7 Ventures. This investment aligns with the UK government’s strategy to strengthen the country’s semiconductor industry, focusing on research and design.

This achievement is particularly poignant as we launch British Innovation Fund II. Our mission continues to identify, support, and grow the UK’s most innovative tech firms, and Pragmatic’s journey is a shining example of what we aim to achieve. The UK’s tech sector is ripe with opportunities, and through our new fund, we aim to unlock even more potential, driving forward technological advancements and economic growth.

The success of Pragmatic Semiconductor is a beacon of inspiration and a benchmark for what we strive to accomplish with British Innovation Fund II. Here’s to many more such success stories!

Pragmatic’s first 300mm wafer fabrication facility in Durham is set to commence production by the end of 2023, with plans to deploy two new lines. Over the next five years, Pragmatic aims to establish eight manufacturing lines in the UK, each capable of producing billions of chips annually at full capacity.

This investment comes at a critical time, as global supply chain diversification gains prominence in the wake of electronic component shortages during the Covid-19 pandemic and geopolitical tensions over chip production. While the UK may not lure large-scale chip manufacturing like Taiwan or South Korea, it’s positioning itself as a hub for chip design and innovation.

As Pragmatic expands its reach into various industries, including packaging, food containers, health monitoring, pharmaceuticals, and security applications, its innovative approach promises lower costs and a reduced environmental footprint compared to traditional silicon-based chips. The UK’s semiconductor industry is on an exciting trajectory, driven by pioneering companies like Pragmatic Semiconductor.

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