Pragmatic Semiconductor is concentrating on scaling production at its County Durham facility despite a dip in revenue and widening losses, with executives saying the company will continue to absorb losses until production and sales reach full scale.
The disruptive semiconductor company, known for low-cost chips thinner than a human hair, is now searching for fresh equity funding after raising £179m in a Series D round. Investment bank JP Morgan has been appointed to lead the hunt for new investors.
Bridge funding and balance sheet
To keep operations moving while the equity raise progresses, Pragmatic has secured £36m in convertible loan notes from existing backers. The interim financing comes as newly filed accounts show a challenging trading year: revenue fell to £901,000 in 2025 from £1.69m in 2024, while operating losses widened from £55.8m to £65.1m.
The company has not yet turned a profit, and bosses said it will keep bearing losses until manufacturing volumes rise and commercial sales gather pace. Given Pragmatic's track record of attracting high-profile investors, there are hopes the upcoming Series E round will also deliver.
CFO addresses delays
Steve McCue, who took over as chief financial officer in March 2025, acknowledged in the accounts that progress had been slower than hoped. But he argued this was due to the “deep complexity of developing an entirely new disruptive technology” and said directors remain confident the business is making significant strides.
McCue wrote: “The directors are pleased to report continued progress with ongoing technology and product innovation and high-volume manufacturing production ramping support of the further commercialisation of the company's proprietary semiconductor technology and manufacturing processes during 2025.”
Technology and production
Pragmatic has developed a fast and sustainable method for producing ultra-thin, flexible chips that are underpinning the digital and AI-led transformation of the economy. The company says its integrated circuits can be embedded in virtually any object, opening the door to item-level intelligence in packaging, logistics and consumer goods.
In 2022, the firm chose Meadowfield Industrial Estate in County Durham as the location for Pragmatic Park, a multimillion-pound, job-creating production site. A second high-volume production line has now been built and installed at the facility, which the company says triples its manufacturing capacity.
The Durham plant is central to Pragmatic's plan to move from prototype to mass production. Its proprietary technology uses a substrate that is far less resource-intensive than traditional silicon-chip manufacturing, using less energy and water while avoiding many harmful chemicals found in conventional semiconductor processes.
Market ambitions
The company completed its Series D equity raise in late 2023, co-led by M&G Catalyst and the UK Infrastructure Bank. At the time, it was billed as the largest European semiconductor venture raise ever. Now, with a Series E round in sight, Pragmatic is targeting an estimated $30bn market, starting with near-field communication applications such as smart labels and inlays used by global packaging firms and consumer brands.
McCue added: “Our RFID chips can enable item-level intelligence to be embedded in virtually any object on the planet. Moreover, our technology has the potential to fundamentally redefine the global semiconductor industry, with demands for greater supply chain resiliency, diversification of global manufacturing footprint in the face of escalating geopolitical tensions, and significant reductions in emissions, all continuing to present strong tailwinds for the company.”
Local and global impact
The company argues that its manufacturing process offers a scalable and capital-efficient route to grow semiconductor capacity, allowing for truly localised chip production in a way unmatched by other technologies. This is becoming increasingly important as geopolitical tensions push countries to diversify their manufacturing footprints and strengthen supply-chain resilience.
Leaders believe that once production is fully scaled, Pragmatic can become a major player in the low-cost chip sector and help meet the surging demand for connected devices, artificial intelligence and the Internet of Things. With the new production line now in place, all eyes will be on how quickly the company can convert its technological promise into commercial success.
