UK's MoD Acquires GaAs Plant to Strengthen Military Supply Chain

MoD

The UK's Ministry of Defence (MoD) has secured the future of a key semiconductor manufacturing facility by acquiring a gallium arsenide (GaAs) plant in Newton Aycliffe, England. The factory, which will now be renamed Octric Semiconductors UK, was purchased from US-based Coherent to prevent its closure, ensuring the UK retains its only secure facility capable of producing GaAs semiconductors vital for military applications, including enhancing fighter jet capabilities.

Coherent, previously known as II-VI, had been seeking to sell the plant as part of its strategy to streamline operations and focus on more profitable ventures, such as silicon carbide wafers and indium phosphide transceivers. However, the MoD's acquisition will not only preserve this critical facility but also boost the UK’s defence industrial capacity and exports.

Investment to Secure Future Defence Technology

The Ministry of Defence plans to invest significantly in Octric Semiconductors UK, with the goal of enhancing the facility's ability to produce advanced GaAs semiconductors for military use. This investment will also pave the way for the development of more powerful chips in the future, strengthening the UK’s defence technology infrastructure.

The plant, originally opened by Fujitsu in 1991, has changed ownership multiple times and has produced III-V-based radio frequency microelectronic and optoelectronic devices for sectors such as communications, aerospace, and defence. Coherent's decision to divest the plant followed a notable decrease in consumer electronics revenue, largely attributed to Apple ending a supply agreement due to design changes in the iPhone.

The UK semiconductor industry has seen several firms close or sell to foreign buyers in recent years, leaving the nation's defence sector increasingly reliant on overseas suppliers. The acquisition of this plant represents a significant step in reversing this trend and bolstering domestic production of crucial military technologies.

"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 Defence Minister John Healey. "This acquisition is a clear signal that our government will back British defence production. We'll protect and grow our UK defence supply chain, supporting northeast jobs, safeguarding crucial tech for our armed forces and boosting our national security."

UK Unveils Critical Raw Material Recovery Plan for Defence Sector

Team Defence Information

MoD Targets CRM Recycling in Defence Supply Chain

The UK Ministry of Defence (MoD) has unveiled a comprehensive framework to recover critical raw materials (CRMs) from end-of-life military equipment, aiming to secure strategic resources and strengthen national supply chain resilience. Developed with trade association Team Defence Information, the plan embeds circular economy principles into procurement, maintenance, and disposal processes across the defence sector. This marks a significant departure from past practices, where most military equipment was discarded without extracting valuable materials.

Defence spending is set to rise, with Prime Minister Keir Starmer pledging an increase to 2.5% of GDP by 2027 from 2.3% in 2024. This growth will drive demand for specialty metals such as rare earth elements, tungsten, and cobalt — all of which face potential supply disruptions due to geopolitical tensions. The framework addresses these risks by prioritising domestic recovery and processing, reducing dependence on imports from politically sensitive regions.

Expanding Domestic Processing and Recycling Capacity

The new strategy identifies vulnerabilities within the UK's critical minerals supply chain, mapping gaps in domestic recovery and refining capabilities. It recommends building vertically integrated recycling operations capable of handling everything from dismantling retired military vehicles to processing complex alloys used in advanced defence systems. By leveraging its mature electronic waste recycling infrastructure, the UK can extend recovery efforts beyond precious metals such as gold, silver, and platinum group metals to include less commonly recycled elements essential for defence technologies.

However, achieving this goal will require substantial investment. The framework calls for stronger financial incentives, such as tax relief and targeted subsidies, to encourage both public and private sector participation. It also suggests that the MoD could directly fund projects aligned with its operational needs, enabling rapid scaling of pilot programmes. Collaboration with research institutions and industry will be key to developing cost-effective recovery methods for metals embedded in complex military hardware.

Strategic Benefits for National Security

Strengthening domestic CRM recovery is not just an environmental initiative but also a matter of national security. A reliable domestic supply of critical metals can shield the defence sector from price volatility, trade restrictions, and supply chain shocks. This is especially important as global competition for critical minerals intensifies, driven by the energy transition and the rapid growth of clean technologies.

The UK’s mature recycling infrastructure, combined with targeted investment in processing technologies, positions the country to become a leader in defence-related CRM recovery. If successfully implemented, the framework could serve as a model for other NATO members seeking to enhance their strategic resource independence while meeting sustainability targets.

The Metalnomist Commentary

The UK’s CRM recovery framework reflects a strategic convergence of defence policy and resource security. By integrating circular economy practices into military logistics, the country can reduce reliance on geopolitically sensitive imports and strengthen its industrial base. The key challenge will be balancing speed of implementation with cost efficiency, ensuring that recovery operations are both technically viable and commercially sustainable.