Compound semiconductor cluster plans to be ratified
Ambitious plans for the world’s first compound semiconductor cluster in south east Wales, with the potential to create 2,000 hi-tech jobs, will move another significant step forward today when a property deal for its location will be ratified.
The deal between the Welsh Government, the cabinet of the Cardiff Capital Region (CCR) and one of Wales’ leading technology firms IQE, will see the cluster located at the former LG Semicon foundry in Newport.
The cluster is being backed by the £1.2bn City Deal for the CCR – which covers the 10 local authorities of south east Wales.
As well as IQE the cluster also has the backing of Cardiff University – with the project also expected to attract other private sector investors and backers as it expands, potentially to other facilities in the region too.
The City Deal has backed the project to the tune of £38m, which is expected to leverage a further £375m in private sector investment – far exceeding the City Deal target of projects supported securing four times investment from the private sector.
Compound semiconductors are essential components inside many of the devices changing the way we live , such a wifi, smartphones, GPS, satellite communications and more efficient LEDs.
They will also be crucial for many of tomorrow’s advanced applications, such as electric vehicles with anti-collision sensors, wearable technology to monitor health and high-efficiency solar cells to use in space.
The facility at Newport, formerly owned by the Welsh Government, will be owned by the 10 councils through special purpose vehicle, CSC Foundry. The space is being leased to IQE for compound semiconductor manufacturing and applications development, helping the establishment of the world’s first compound semiconductor cluster.
The proposal seeks to return the original investment plus interest over the life of the project.
The project will be formally confirmed at a signing ceremony today at IQE’s headquarters in Cardiff by Secretary of State for Wales Alun Cairns, Welsh Economy and Infrastructure Secretary Ken Skates, CSC Foundry directors councillors Bob Greenland (Monmouthshire) and Andrew Barry (Merthyr), and IQE chief executive Dr Drew Nelson.
The region’s City Deal seeks to position the region as the global leader in compound semiconductor enabled applications, which was initiated by a £12m investment from the Welsh Government.
Last year Innovate UK – the UK Government’s innovation agency – announced a £50m investment to establish a new Compound Semiconductor Applications Catapult in south east Wales. This new catapult will build on existing investment by Cardiff University, IQE, and the Welsh Government.
Leader of Monmouthshire County Council, and deputy chair of the CCR City Deal regional cabinet Peter Fox 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 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.”
Mr Cairns said: “Compound semiconductors are at the heart of many devices we use today, from smart phones to tablets and satellite communication systems. It is an area of UK strength and today’s confirmation of the development of a cluster of excellence in Wales reinforces our own strong position in the growth of this important and growing technology.
“Of course, government does not create innovation, but it can be a catalyst to getting the scientists and engineers, the designers and the entrepreneurs together to make it happen.
“This collaboration is important because innovation is a shared endeavour and I look forward to seeing the cluster take shape and create a lasting engineering and manufacturing legacy in Wales.”
Economy Secretary Ken Skates said: “It is hugely encouraging that Welsh Government’s initial £12m investment in developing the cluster back in 2015 has been the catalyst for today’s announcement that IQE plans to expand into the City Deal’s new facilities. Not only is it extremely exciting news for the Welsh economy, securing additional jobs and investment, but it further cements Wales as a world leader in this stateof-the-art technology.”
Dr Nelson said: “Compound semiconductors are rapidly defining 21st century technologies and Wales is uniquely positioned to be centre stage of this global, hi-tech industry sector.
“This dedicated compound semiconductor facility between Cardiff and Newport will act as a key component of the burgeoning cluster that is already cementing Wales’ reputation for technology leadership.
“The initiative is a shining example of what can be achieved through collaboration.
“The Welsh and UK governments, along with the 10 councils that form the Cardiff Capital Region, have worked closely with academic institutes and industry to build an innovation infrastructure that will support and nurture the region as a true global player in new and emerging technologies.
“The facility will become the base for a number of compound semiconductor-related activities, including IQE, where we expect to rapidly expand our production capacity to meet increasing demand for our technology.”