Chip maker Pragmatic has raised £182m to fund an expansion of its manufacturing facilities in a boost for UK semiconductor production.
Cambridge-headquartered Pragmatic said it has secured £162m and has an additional £20m of capital allocated for a limited second close.
In the short term, Pragmatic will use the influx of capital to build its third and fourth fabrication lines at its manufacturing facility in Durham.
Each line is capable of producing billions of Pragmatic’s flexible integrated circuits, which are thinner than a human hair.
The chip firm added that it plans to build “at least” eight more manufacturing lines in the UK over the next five years, which Pragmatic says would create over 500 “highly skilled” jobs in the North East and Cambridge.
“Scaling our manufacturing capacity on the UK’s first ever 300mm wafer production lines at our site in Durham will enable us to deliver hundreds of billions of chips to customers worldwide over the coming decade,” said David Moore, CEO of Pragmatic.
Founded in 2010, Pragmatic’s flexible chips are used across various sectors, ranging from healthcare to consumer goods.
Vote of confidence in British semiconductors
The Series D round was co-led by M&G’s Catalyst and UK Infrastructure Bank. Pragmatic also attracted funds from new investors Northern Gritstone – the investment firm focusing on startups and spinouts in the North of England – along with Latitude and MVolution Partners.
Existing investors British Patient Capital, Cambridge Innovation Capital and Prosperity7 Ventures provided further financial backing.
The funding round signals a vote of confidence in British semiconductor manufacturing, with the majority of the cash – more than 70% – coming from domestic investors.
Earlier this year Pragmatic co-founder Scott White suggested the company might move operations to the US if the government did not provide adequate support the industry.
White’s comments came as the UK awaited the publication of the government’s semiconductor strategy. Many in the UK’s semiconductor industry pointed to the CHIPS Act in the US, which provides billions of dollars to firms in a bid to increase domestic supply.
In August, Pragmatic appeared to soften its stance after the UK published its long-awaited semiconductor strategy, which promises funding of up to £1bn over the next 10 years.
Michelle Donelan, the technology secretary, said Pragmatic’s funding round is a “pivotal step in our work to build a stronger future for the UK’s semiconductor industry, by doubling down on British strengths in research and design”.
Donelan added: “I am determined to ensure firms like Pragmatic can stay and scale here in the UK, harnessing our unique strengths to unlock innovation, create high-skilled jobs, and cement our status as a global superpower in science and technology.”
John Flint, CEO of UK Infrastructure Bank, said: “Our investment in Pragmatic backs a British business to accelerate development of a first-of-a-kind technology which not only cuts the carbon emissions of semiconductor production, but which will drive growth in the local economy in the North East.”