The Courier & Advertiser (Perth and Perthshire Edition)
Major Glenrothes employer’s plan to double sales
The boss of Glenrothes semiconductor manufacturer Semefab feels the best is yet to come for the hi-tech venture.
Managing director and founder Allan James said the capabilities his company has built up are unique in the UK.
He reported that 2020 was a very strong year for Semefab, whose products are being used in the battle against Covid-19.
Allan would like to see the firm’s annual turnover doubling to £25 million in the next five years while also increasing staff numbers by 30%.
Semefab, which was set up in 1986 and is based at Eastfield Industrial Estate, employs nearly 120 people.
The managing director previously worked for General Instruments (GI) in Glenrothes, where he was manager of a semiconductor processing facility (also known as a wafer fab).
In those days, Allan had no idea about running a business but had always wanted to have his own firm – and an exciting opportunity presented itself when GI decided to close its Scottish site.
What caught his eye was the old four-inch wafer fab which had been mothballed latterly to save cash.
But there was one problem – he needed to raise £500,000 to strike a deal, so he contacted several possible backers before small English company Semelab took the plunge.
The managing director added: “I didn’t realise what a huge challenge it would be to set up a semiconductor manufacturing plant from scratch on a shoestring.
“I still remember a sinking feeling in the pit of my stomach walking into GI’s wafer facility which had been switched off for the best part of a year and pillaged here and there for spare parts, and realising that we had to completely rebuild it from the ground up.”
When GI closed its business in Glenrothes, Semefab managed to hire some of its best people.
The start-up team of nine included John Bruce, who was to become Allan’s right-hand man as joint managing director for more than 20 years – taking operational and development responsibilities while Allan concentrated on building the customer base.
The managing director added: “Great credit is due to John for his commitment and service to the company over more than 30 years. Sadly, he passed away in 2018.”
Semefab started out by licensing bipolar transistor technology from GEC and producing these devices for Semelab.
Allan said: “We then picked up some old GI business with telephone dialler chips for the South African post office. This led us into serving the Swiss watch market with watch chips.
“The association with the Swiss watch industry would lead us into serving Swiss start-ups from the CSEM Institute in Neuchatel for pressure sensors and gas sensors – which has laid the foundation for Semefab’s burgeoning microelectronic and mechanical systems (MEMS) business today.
“MEMS is one of two strands that Semefab is developing strongly into the future – the other being power switching semiconductors for electric vehicles, car chargers and smart power modules for motor drive and smart grid applications.
In 2008, Allan applied successfully for a government scheme called the Micro and Nano Technology Initiative – this provided £6.8 million in matched funding for capital equipment. Meanwhile, Semelab contributed £2m for a new clean room and facilities.
Expansion over the years means Semefab now operates three wafer fabs.
The managing director said: “In my view, the best years for Semefab are yet to come.
“The reason I say this is that we have substantial spare capacity in our two newer wafer fabs.
“The markets we enjoy in MEMS sensors and power electronics are massive and there are always new and exciting opportunities presenting themselves. We hold a unique position in the UK with the capabilities that are here.
“I won’t be satisfied until Semefab has achieved its potential.”
Allan said his business has been very fortunate in that Covid-19 has not affected operations adversely.
“During 2020, we have had a very strong year,
largely due to 12 million thermopile non-contact temperature sensor chips sold to customers in China manufacturing forehead temperature guns used in the fight against Covid-19.
“Also, our sales of low-pressure sensors grew significantly due to their use in ventilators, respirators and maintaining pressure in isolation ward settings.
“This demand meant that we have been categorised as essential working status and we have not been required to shut down at all.”
Semefab has around 30 customers – split equally between Europe, the US and the Far East.
There are just two shareholders in the firm – Allan and a company called Hicks 2, who hold the original Semelab shareholding.
The managing director plans to secure a long-term future for the business by eventually releasing equity to an external partner – probably a key customer.
Allan revealed he has already turned down several overtures from would-be buyers in China and the US.
He added: “My take on this is that I am not interested in selling Semefab short and we have yet to fulfil the potential of using our spare capacity.
“A company like Semefab should be running 24/7 because we have all of the energy costs anyway and a high percentage of other costs are either fixed or semi-variable. This has the effect that incremental business comes through as extremely profitable.”