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Signing seals world’s first compound semiconductor cluster

11 September 2017

Compound semiconductor product

The Cardiff Capital Region City Deal, Welsh and UK Governments have ratified the development of a compound semiconductor (CS) cluster in South East Wales.

The ceremony at the Cardiff headquarters of IQE plc paves the way for the Newport foundry development, backed by Cardiff University.

Secretary of State for Wales, The Right Hon. Alun Cairns MP, 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 formally signed the Foundry deal.

Welcoming the pact, Cardiff University Vice-Chancellor Professor Colin Riordan said: “Cardiff University fully supports the CSC Foundry and Cardiff Capital Region (CCR) City Deal’s vision to create a Foundry that can drive prosperity. The wider CS cluster involves companies in all 10 local authorities across the CCR, and has the power to generate highly paid jobs across the whole region.”

The ceremony 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 to establish a CSC Foundry, with the potential to lever £375m of private sector investment and create up to 2,000 high skilled jobs.

"The University has a major stake in the future success of the CS cluster through our Institute for Compound Semiconductors, which is funded by Welsh and UK Government, the Compound Semiconductor Centre – a joint venture with IQE – and the Future Compound Semiconductor Manufacturing Hub, funded by EPSRC."

Professor Colin Riordan Vice-Chancellor, Cardiff University

CSC Foundry is the first major investment since the £1.2bn CCR City Deal programme was signed by the 10 local authority leaders in March.

The facility at Newport will be owned by all 10 Councils in the Regional Cabinet under the special purpose vehicle ‘CSC Foundry Limited’ / ‘LDC Ffowndri’ and the space will be leased to IQE plc for CS manufacturing and applications development.

In 2016, 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 Welsh Government.

Secretary of State for Wales Alun Cairns said: “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. 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 state of the art technology."

Ken Skates AM Cabinet Secretary for Economy and Infrastructure, Welsh Government

Dr Drew Nelson, Chief Executive of IQE plc said: “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."