Pragmatic Semiconductor points to progress as losses widen amid significant investment – Business Live
The chipmaker has secured substantial equity investment to realise its ambition of disrupting the industry
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Losses have widened at chip manufacturer Pragmatic Semiconductor as investment into its North East production lines continues.
New accounts for the flexible chip specialist, which has pioneered low cost integrated circuits that are thinner than a human hair, show it incurred operating losses of more than £36.7m across 2023, a 62% rise on the previous year. That came on increased revenue of £1.7m, up from £1.5m.
Bosses described significant progress made throughout the year and said the losses are expected to continue until the firm increases production at its new Durham factory on the 15-acre Pragmatic Park site, the initial stages of which were completed last year housing its second fabrication line in addition to an existing facility at NETpark. Pragmatic, which has headquarters in Cambridge and employs about 240 people, is hoping to produce more than five billion chips per year on the line at a much lower cost to existing silicon products.
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The numbers follow a £182m equity fundraise announced in December and including the backing of investors M&G Catalyst and the UK Infrastructure Bank. Pragmatic has called the move the largest European semiconductor venture raise ever, with the money earmarked for expansion of Pragmatic Park and the potential creation of hundreds of jobs.
Pragmatic's flexible semiconductors are put to a wide range of uses including in trackable packaging, within wearable health monitors and in pharmaceutical authentication systems. Bosses have their eye on a future $50bn global market with Pragmatic suggesting the chips could be embedded in just about any object.
In recent days the Government has announced a UK Semiconductor Institute, backed with £1bn, which will act as a conduit between the Government, universities and manufacturers to build strength in UK production. It will help implement the National Semiconductor Strategy which includes support for identified British strengths in compound chips, design and research and development.
Responding to the creation of the Institute, David Moore, CEO of Pragmatic said: "We were delighted to complete the largest European semiconductor venture raise in December 2023, co-led by UK Infrastructure Bank and M&G, with 70% of the round coming from UK investors. This funding will accelerate continued expansion of our manufacturing capacity in the North East of England taking volume from billions of flexible integrated circuits (FlexICs) to tens of billions per year.
"As a UK-based semiconductor company, servicing a global customer base, we welcome efforts to provide access to technology to foster the growth of emerging businesses, drive the expansion of the sector talent pool and promote international partnerships. The institute represents a significant opportunity for building out new infrastructure in support of areas where the UK can lead on the global stage, including advanced materials and disruptive, new approaches to semiconductor manufacturing at scale."