Investors including Arm have pumped $80m into the company developing chips thinner than a hair

A BRITISH microchip company is building a new factory in the North East to produce flexible processors intended to power the next phase of the internet.

PragmatIC Semiconductor, which is headquartered in Cambridge, has raised $80m (£58m) from investors including chip designer Arm for a new plant in County Durham which will create more than 100 jobs.

The facility will be used to help develop flexible integrated circuits, chips thinner than a human hair that can be used to add connectivity for tiny monitoring devices such as those which will be installed in Wi-Fi-connected machines and household appliances for the so-called “internet of things”.

Uses include adding digital connectivity to packages by giving them “smart” barcodes, or creating data ­capabilities in medical dressings and clothing.

The cash injection comes from Arm, a Cambridge company that last year agreed to a takeover by US giant Nvidia, as well as investor Cambridge Innovation Capital. PragmatIC plans to use the funding to grow its workforce from around 120 people to more than 250. It will be the company’s second factory, alongside a site in nearby Sedgefield.

The funding comes amid concerns over global chip supplies. Foundries have struggled to keep up with surging demand from carmakers and consumer electronics companies and have pledged to spend hundreds of billions of pounds on expanding their facilities. The chip industry is heavily reliant on production facilities in Taiwan and there are calls to diversify so Western countries are more self-reliant.

Typical chips are designed using tiny films called silicon wafers which require weeks of processing, as well as substantial infrastructure and investment in complicated chemical processes. Taiwan’s TSMC, the world’s largest chip producer, is ­planning a $100bn upgrade of its ­facilities to meet booming demand.

PragmatIC, however, has been developing a new type of semiconductor that and can be embedded into a malleable surface. It does this using a novel metal oxide which is easier to produce and can be readied within 24 hours.

Scott White, PragmatIC’s chief executive, said:

“One of our objectives is to build this as a British technology. Historically, we had a very extensive semiconductor industry, and for a variety of reasons that has reduced. But the UK has a wide expertise base. We see an opportunity to build a new semiconductor industry in a globally unique technology.”