Pure Wafer has given up on its plans to reopen its Swansea factory, which was damaged in a fire at the end of last year (www.purewafer.com).

The company will continue its operations at its facility in Prescott, Arizona, and will use the cash sum from its insurance claim to “facilitate a return of surplus funds to shareholders, once all attendant liabilities have been settled”.

It will now enter a consultation period with 115 former employees at the Swansea factory to “mitigate the effects of any redundancies and provide additional support to affected staff”.

In March, Pure Wafer submitted plans to repair the factory to Swansea Council, having previously said that it would take up to 12 months for production to restart there. In a statement earlier this month, the company said: “The board has taken this decision after careful consideration of the costs of rebuilding the factory and replacing the specialist machinery, plus the time this would take and the fact that many of the Swansea facility’s customers have already migrated to competitors.

“It has also carefully considered other alternative courses of action, including a partial reopening of the Swansea facility or investing the proceeds of the insurance settlement in other operational facilities or related businesses.”

Pure Wafer, which recycles computer chips for semiconductor manufacturers, said that the fire led to exceptional costs of £10.4 million in its half-year accounts covering the six months to 31 December.