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Report highlights CS cluster’s resilience

22 April 2021

A report that examines economic activity in Wales and the impact of the CSconnected Compound Semiconductor community has been published by Cardiff University’s Welsh Economy Research Unit (WERU).

The report focuses on the contribution to the economy by the CSconnected consortia during 2020.

The South Wales group of compound semiconductor organisations has engaged in a range of high-profile activities funded under the Strength in Places Fund, managed by UK Research and Innovation (UKRI).

The report finds that in the final quarter of 2020, CSconnected firms and organisations accounted for an estimated 1,407 jobs, with private sector partners accounting for around £440m of sales, much of which (over 90%) related to overseas exports, mostly destined for markets outside the EU.

Employment within the compound semiconductor cluster has been stable in the challenging economic conditions during the global pandemic, and with output largely maintained at a time when there has been an overall contraction in UK economic activity.

The maintenance of economic activity in the compound semiconductor cluster is against a backdrop of a Welsh manufacturing sector which has seen a number of significant closures and rationalisation announcements.

Prospects in the Cluster for 2021-22 are good, with increased vacancies and positive sentiment prevailing on business conditions. In order to meet growth expectations, CSConnected, in partnership with Cardiff University, has launched a co-ordinated skills development activity which will scale in line with Cluster growth from 2021 to 2025.

The Welsh economy benefited from a contribution to GVA from CSconnected firms and organisations, estimated at £121.3m during 2020. Productivity in the Cluster is one of its strongest points. In 2020 it is estimated that average GVA per employee in the Cluster was around £86,000 which is over double the Welsh average.

The report suggests that once account is taken of the role of the Cluster in supporting local suppliers and household incomes, the economic contribution of the Cluster to Wales grows to around £172m with around 2,100 full time equivalent jobs supported.

The report concludes that the resilience of CSconnected community activity through 2019-2020 was very marked, with the Cluster showing excellent prospects for further employment and GVA growth in 2021-22.

Chris Meadows, Director of CSconnected Ltd, said: “UKRIs Strength in Places programme has provided the CSconnected community in South Wales with a unique opportunity to align world-class academic research and core supply elements such as capital equipment and device packaging based in the region. The project will accelerate Wales’ unique capability to be centre stage at the forefront of new and emerging technologies. CSconnected aim to bring high value-add manufacturing back to UK and create significant jobs growth over the coming years.”

Max Munday, one of the report authors, said: “The development of the compound semiconductor cluster is important for long term economic prospects for the regional economy. Critically, there is an evolving industry ecosystem in Wales that embraces the private sector firms, institutions and higher/further education colleges. The UKRI Strength in Places support is going to provide new opportunities to better embed cluster activity in the regional economy.”

The report may be viewed here.

The report was written by Professor Max Munday, Dr Annette Roberts and Professor Robert Huggins, Cardiff University and builds on their previous work developed to support the Strength in Places (SIP) Fund application process in 2019.

WERU is a member of Cardiff University’s Social Science Research Park (SPARK) - a collective of leading social science research groups that work together to develop innovative solutions to societal problems through collaborative research activity. WERU will co-locate in Cardiff’s bespoke innovation centre,  sbarc | spark, this autumn.

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