The investment will be used to produce GaAs and GaN ICs for military systems, radar systems and power electronics.
The MoD says it is open to offers to share ownership of the fab.
Octric says it will expand with additional manufacturing processes and products and is looking for engineers with experience in compound semiconductors such as GaAs, GaN and InP.
Octric describes itself as the foundry for the next generation of semiconductors.
The £200 million is part of a ten year investment programme in the fab which was opened by the Queen in 1991 as a Fujitsu DRAM fab.
Fujitsu sold it in 1999 to Filtronic, a GaAS specialist, so initiating the fab’s transformation from a silicon fab to a compound semi fab.
In 2008, it was sold to RF Micro Devices and in 2013 was sold on to Compound Photonics, an optical transceiver specialist.
In 2017 Kaiam Corp, also an optical transceiver firm, bought the fab and, later that year, sold it on to II-VI (later renamed Coherent).
