Hundreds of jobs may be created in Sussex following the expansion of a high-tech manufacturer.

Newhaven-based Surrey Nano- Systems has secured £2.5 million of funding from various investors to develop carbon nanotubes for use in microchips.

Ben Jensen, chief technology officer for the company, said the money would lead to the recruitment of about a dozen more highly skilled engineers, doubling the size of the present workforce.

But within the next three years, he added, Surrey NanoSystems would look to employ hundreds of people once the technology was ready to be mass produced.

The company was established in 2006 as a spin-off from the University of Surrey’s Advanced Technology Institute.

It is working on developing tiny carbon nanotubes, which are on average approximately 1/50,000th of the width of a human hair and incredibly efficient conductors.

Until now, it has been difficult for the technology to evolve because nanotubes are “grown” by combining gases in a special reactor at a temperature of more than 700C.

Micochips cannot survive at such temperatures.

Surrey NanoSystems has been able to solve this problem by growing nanotubes at 350C or less.

Mr Jensen said: “The semiconductor industry urgently needs a new interconnection technology.

“If you can solve the problem of growing precision carbon nanotubes at silicon-friendly temperatures – and we have – it opens up a massive potential market.

“We expect to be the company that is able to offer a viable new interconnection process for high-volume semiconductor fabrication – one that exploits the incredible performance properties of carbon nanotubes.”

The new funding will allow Surrey NanoSystems to greatly extend its engineering and development capabilities with a new technology laboratory, several new systems of its own design and more staff.

The money has mainly come from Octopus Ventures, a specialist investor in early stage and expanding companies, which provided £1.75 million, and a combination of the company’s original investor, IP Group, the University of Surrey and smaller investors, which together provided £750,000.

Should the company start mass producing in Sussex, it would be the second high-tech manufacturer to commit to the county in recent times.

Earlier this year, fuel cell innovators Ceres said it would be opening a plant in Horsham by the end of 2009, which would eventually employ hundreds of people.