Tyneside chip plant receives eleventh-hour reprieve

US chip maker Atmel has received a £27.8m grant from the UK government to assist in the acquisition of the former Siemens semiconductor manufacturing plant in North Tyneside, England.

US chip maker Atmel has received a £27.8m grant from the UK government to assist in the acquisition of the former Siemens semiconductor manufacturing plant in North Tyneside, England.

The factory was previously owned by Siemens, which had also received government grants, but was closed during 1998 just 18 months after it was opened. Amtel, which will create up to 1,500 jobs at the plant over the next three years, did not divulge the total amount paid to Siemens. Bob Henderson, corporate marketing director for the San Jose division of Atmel, said the £27.8m grant was awarded following stringent examination by the UK government. He told silicon.com: "They wanted to be certain and not finish up in the same boat as Siemens. Once they were happy with everything the government gave us the go-ahead." The testing and installation of equipment will take place over the next six months. Once complete and all the equipment has been qualified, production is expected to begin during May or June of next year. Mat Hanrahan, analyst at Bloor Research, said described the sector as a boom industry. The plant will produce mixed signal and non-volatile memory and RF semiconductors for use in mobile phones as well as smart cards and set top boxes. He said: "RF semiconductors - people can't get enough. With the demand that will come from Bluetooth and 3G will be very high". Hanrahan added that it was an inevitable move given the facility available and the financial assistance of the UK government. The factory is the US company's first silicon manufacturing plant in the UK. It also has two operations in France and one in Germany plus ten design centres across Europe.