A company spun out of Cambridge university to make cheap plastic microchips has won the promise of a $650m investment from Russia’s state-backed nanotechnology corporation.
Rusnano will take an immediate stake of about 25 per cent in Plastic Logic in exchange for an initial injection of $150m. The Russian government may eventually take control as the rest of the finance becomes available.
The deal marks an effort by Russia to diversify into a promising technology, but it has raised worries about the UK’s ceding a lead in an emerging industry.
Plastic Logic plans to bring out a new family of plastic chips by 2016, at which point it hopes to reach $1bn in annual sales.
The microchips promise to be cheap enough to be incorporated into a wide range of manufactured items, enabling people to keep track of lost property, while also adding rudimentary “intelligence” to humble items such as toasters.
Lord Mandelson, business secretary in the last Labour government, said it now seemed that the technology would join the list of scientific areas “developed in Britain but commercialised elsewhere”.
Even before the Russia deal, Plastic Logic had an international profile with a research laboratory in Cambridge, head office in California and its first plant in Germany.
Other areas of technology that Britain played a big part in developing but where the country’s commercial strength is weak include computers, electricity generation equipment and medical scanners.
However, David Willetts, the UK science minister, said there was “no way” that any UK government agency would invest $650m into a technology company to help its expansion.
The Russian and Chinese governments were the two main contenders to take a large stake in Plastic Logic after the company started seeking new funding over the past year.
Set up in 2000, it has received $200m from existing investors including the venture arms of Intel, Dow Chemical and BASF.
Under the new Russian-backed plans, Plastic Logic will build a new factory near Moscow while stepping up its liaison with Russian scientists.