Councils in Cardiff Capital Region investing £37.9m to establish compound semiconductor foundry

Signifying the first funding since a £1.2bn City Deal was formally agreed in March with the Welsh and UK governments, ten local councils in the Cardiff Capital Region (CCR) are to invest £37.9m to create a new foundry for compound semiconductor applications development and high-volume manufacturing, as part of what is reckoned to be the world’s first compound semiconductor cluster, being established in South Wales.

Owned by the ten councils, the foundry will lease space to compound semiconductor manufacturing and applications development companies. Discussions on site location are on-going, targeting the start of construction in the early summer. The project is expected to leverage up to £365m of private sector investment over the next five years.

“The University has invested millions of pounds in partnership with IQE, and today’s announcement is excellent news for innovation, industry and enterprise in South Wales and beyond,” comments professor Colin Riordan, vice chancellor of Cardiff University. “It offers a real opportunity to build Europe’s first compound semiconductor applications cluster and create a world-class powerhouse to commercialize next-generation technologies.”

The CCR City Deal aims to position the region as the European leader in compound semiconductor-enabled applications. In 2016, the UK Government’s innovation agency Innovate UK announced a £50m investment to establish a new Compound Semiconductor Applications Catapult in South Wales – located in the CCR – building on existing expertise and investment by Cardiff University, Cardiff-based epiwafer foundry and substrate maker IQE plc, and the Welsh Government.

South Wales supply chain

“The objective of these commitments is to create a complete compound semiconductor eco-system in South Wales to take advantage of the growing prominence of compound semiconductor technologies,” says councillor Andrew Morgan, leader of Rhondda Cynon Taf County Borough Council and chair of the City Deal Regional Cabinet. “This requires the development and integration of a compound semiconductor supply chain in South Wales, with the economic and social benefits that will bring,” he adds.

“There are semiconductor clusters across Europe, around Eindhoven, Dresden, Leuven and Grenoble,” note councillor Peter Fox, leader of Monmouthshire County Council (leading the project) and councillor Anthony Hunt, leader of Torfaen County Borough Council (who co-leads on CCR City Deal’s business and innovation portfolio). “However, these are based on silicon technologies, hence this is a unique opportunity for Wales to establish the world’s first compound semiconductor cluster,” he adds.

“We are very impressed to see council leaders with the vision to make investments like this,” comments IQE’s chief executive Dr Drew Nelson. “IQE already has a very strong presence here, and is looking to invest in building significant additional production capacity as part of this deal over the next 5 years. Our investment will see the next stage of our growth firmly rooted in CCR,” he adds.

“It is not often that the opportunity presents to be in at the start of something with international credentials,” comments Kevin Crofton, chairman of the Compound Semiconductor Applications Catapult.