ME and Ophelia

UK firm Plastic Logic has said it will build the world's first factory to produce plastic electronic chips.

The Cambridge-based company has secured $100m (£50.6m) venture capital funding for the German plant.

Once built it will manufacture circuits crucial for the development of novel devices such as electronic paper.

Unlike silicon, plastic circuits can be made using simple printing techniques and could dramatically reduce the price of consumer electronic goods.

The factory will be built in Dresden, known for its strength in silicon technology.

Plastic spin-out

Plastic Logic is a spin out from Cambridge University and has been developing plastic electronic devices since 2000.

The firm is working on "control circuits" that sit behind screens on electronic displays. In particular, it is working on the electronic circuitry for "electronic paper" displays.

These flexible devices can store the text of thousands of books or newspapers and could one day replace paper.

Industry experts forecast the market for plastic electronics could be worth $30billion by 2015.

When it is built in 2008, the new factory could produce one million control circuits in a market that is tipped to expand to 41.6 million units in 2010.

The factory will be backed by funding from Oak Investment Partners and Tudor Investment.