South Wales to become global semiconductor centre

Supplier of semiconductor wafer products, IQE plc, Cardiff Capital Region Deal, and Welsh/UK governments have ratified the development of a Compound Semiconductor (CS) cluster in South East Wales.

The deal was signed at semiconductor firm IQE – image courtesy of IQE

The CS Connected Cluster unites international businesses, policymakers and academics who are building next-generation semiconductor technology that can position Wales as a world-leader.

The signing followed an agreement in May by the Cardiff Capital Region (CCR) Regional Cabinet to contribute £37.9m from the CCR City Deal’s Wider Investment Fund towards the establishment of a state of the art foundry, as an anchor in the region for high-end production of compound semiconductors.

Councillor Peter Fox, leader of Monmouthshire County Council, and deputy chair of the CCR City Deal Regional Cabinet, said: “The objective of this commitment is to create a complete compound semiconductor eco-system in South Wales to take advantage of the growing prominence of compound semiconductor technologies.”

The aim being to support the development of a compound Semiconductor Industrial cluster in the region, with the potential to: 

  • lever £375m of private sector investment,
  • create up to 2,000 high skilled jobs,
  • return the investment for use on other regional schemes, and
  • create hundreds more jobs in the wider supply chain cluster

It is the first such investment since the £1.2bn CCR City Deal programme was formally signed by the leaders of the ten local authorities in the region on March 1.

The facility at Newport will be owned by the 10 councils in the regional cabinet under the special purpose vehicle ‘CSC Foundry Limited’ / ‘LDC Ffowndri’ and the space leased to IQE plc for compound semiconductor manufacturing and applications development, helping the establishment of the world’s first Compound Semiconductor Cluster, CS connected, in the region.

The project is not a grant or a loan – it is a commercial investment with ownership of the foundry shared between the 10 councils. The proposal seeks to return the original investment plus interest over the life of the project.

Fox continued: “The opportunity this investment creates, to help the establishment of the world’s first compound semiconductor cluster in South East Wales, should not be underestimated.

“It has the potential to place our region at the heart of this cutting edge sector and will require the development and integration of a compound semiconductor supply chain in South Wales, with the economic and social benefits that will bring.”