South Wales to become global semiconductor centre with £38 million deal

The south of Wales is upping its stakes to become the centre of semiconductor production. In a deal worth £38 million, firms in Wales will be given a boost to develop technology to power generation robotics, 5G and driverless cars. The region is set to become a cluster for firms developing such technology, with the aim to attract £375 million of private investment and create as many as 2,000 jobs in the area.

The technology has traditionally been deployed in next generation smartphones, but can also be used in controlling energy efficiency, airport security and is being incorporated in the rise of the internet of things. The south of Wales cluster aims to be a world first for these types of compound materials. It is the first investment under the £1.2bn Cardiff Capital Region city deal programme.

As part of the deal, the 10 councils in south east Wales will be investing in and will own the foundry in Newport. This will be refurbished at a cost of £8m with £30m needed to kit it out.St Mellons-based IQE plc will take over the lease to produce compound semiconductors and applications. The tie-up already includes scientists at Cardiff University.

Councillor Peter Fox, deputy chair of the city deal’s cabinet, said: "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."

It is yet another example of technology hubs propping up outside of London. Compiled by the Open Data Institute and the Digital Catapult organisation, a recent Index revealed that areas outside the capital are showing significant signs of growth. In particular, smaller cities across the UK are fuelling technology innovation in niche areas such as manufacturing, virtual reality and IoT production. The survey found that while London, Edinburgh, Manchester, Brighton and Southampton are the top five cities for data innovation, Reading and Liverpool are leaders in the internet of things (IoT). Meanwhile Coventry and Aberdeen topped the leaderboard for manufacturing and Cardiff was also identified as showing ‘early signs of an emerging virtual reality innovation cluster’.