The Times | Katie Prescott 21 Jul 2023
A Cambridge-based semiconductor business has shrugged off the economic downturn and raised $35 million more than it had planned after seeing a surge in demand from investors.
It has brought the total for Pragmatic’s latest funding round up to $125 million. The company is using the investment to scale up its production by more than five times and to build its second manufacturing facility, known as a fab, in Durham.
The new investors taking part in its Series C raise, which was supposed to have closed at the end of last year, include British Patient Capital, a commercial subsidiary of the British Business Bank, the UK government’s economic development bank, and In-Q-Tel, which invests in high-tech companies for the US intelligence community and its allies.
Founded in 2010, Pragmatic designs and manufactures a new kind of flexible semiconductor that is thinner than a human hair and not made of traditional silicon, which means it is cheaper and quicker to make. Scott White, chief executive of Pragmatic, said: “Over the next decade we’re intending to roll out over 100 fabs in a variety of locations around the world, producing trillions of items for people. But we would like the centre of gravity for that, as much as possible, to remain in the UK.”
These microchips can be used for applications such as low-cost sensors, wearable technology for the health industry and in packaging, which is not possible with more static microchips.
The company has worked with the likes of Unilever, the consumer goods giant, to help with its inventory control and to target its marketing. White said:
“You can add a unique identifier into packaging so you can track it through the entire supply chain, even to the recycling and reuse of the packaging.”
Pragmatic works with customers to find out what they need from their microchips, then an in-house team designs and manufactures the semiconductors. “One of the challenges in the silicon industry has always been that designing a product is a very lengthy, expensive process,” White said. “Then when you have finally designed it, it takes a minimum of three months to manufacture a silicon chip, and typically it’s more like six to nine months. With our process we can do the manufacturing in less than two days.”
Catherine Lewis La Torre, chief executive of British Patient Capital, said:
“Pragmatic is another great example of a UK company which has developed and commercialised world-leading technology from a UK base.”
Severe shortages of semiconductors during the pandemic raised the profile of these components that are vital to electronics.
Countries around the world are looking at bringing more of their production on shore to safeguard their supply chains. The UK is lagging behind the US and the EU, which passed legislation to expand their industries this year. The Department for Digital, Culture, Media and Sport was due to publish a semiconductor strategy for the UK this autumn. It is now expected next year.