Event Round-up: How to build a world leading semiconductor cluster: Lessons from Wales

• The semiconductor industry in Newport, Wales, has been a significant part of the community for decades, sparking excitement and connection within the local community “Chips and Wafers used to conjur up images of Barry Island Beach,” but now many in Newport are in some way connected to this cluster. 

• The industry plays a crucial role in Welsh and UK innovation, with applications across defense, transportation, healthcare, energy, and consumer electronics. 

• The success of the semiconductor cluster can serve as a blueprint for the sector globally, guided by its principles of ambition, foresight, and collaboration. From the Inmos microprocessor factory opening in Newport in 1982, the cluster has developed into a hotbed for innovation.  

• Partnerships between Academia like Swansea and Cardiff University, Industry like IQE, SPTS and Newport Wafer fab and the Welsh Government has been essential for driving the cluster's goals and making Wales a global leader in the field. 

• Education and skills development, particularly through universities in South Wales, are crucial for sustaining the cluster's growth and innovation. In Newport, both secondary schools and primary schools have been approached by industry to showcase the sector. 

• Manufacturing, especially in wafer production, is fundamental to the semiconductor cluster's future prosperity in Newport. 

The Welsh Economy Minister, Vaughan Gething MS provided a video address to our audience. Here the Minister discussed two new Welsh Investment zones, the role of Compound Semiconductors in both the Welsh digital economy and economy more widely, and what the Welsh Government is doing to support it. To read our full summary, click here: 

Mark John, co-founder of Tramshed Tech, delivered the first presentation of the afternoon. Mark began by contextualising the Welsh tech sector. Click here to download the slides.

• Mark began by outlining Tramshed Tech's programmes such as the renowned Startup Academy, Investor Readiness, Greentech Accelerator, and the Soft-Landing programme for international tech companies looking to get a foothold in Wales. This has attracted high potential companies from Nigeria, Paraguay and India into the Welsh ecosystem. 

• The Welsh tech ecosystem exported approximately £17.8bn in 2019, but only 5% of the 106,015 business in Wales were exporting. In contrast, the Welsh Compound Semiconductor cluster globally exports more than 95% of its products. This shows the clusters massive international significance, and is part of the reason the UK National Strategy identified the cluster as a top UK strength. 

• The Welsh tech sector has already grown 83% since 2010, currently valued at £8.2bn. Direct and indirect employment in this cluster increased 9% last year, to now over 2,600 people. 

• Mark also flagged the Chips Coalition, of which he is a member, which converges industry leaders to provide recommendations to the UK Government. TechUK, alongside Global Tech Advocates and TechWorks play a leading role. If you’re interested in joining the Chips Coalition, find out more here. 

Jessica Leigh Jones: 

Jessica is the founder and CEO of iungo solutions. Jess explored the skills deficits present in such a technical sector and what her business doing to mitigate this challenge.  Slides available here.

• Jess began bye exploring Wales’ recent economic history. For example, in the South Wales Valleys, 1 in 5 people are economically inactive. However, by 2025, the Semiconductor workforce is predicted to triple, with salaries in the sector 60% higher than the national average. This presents a huge opportunity to transform both local economies and drive forward the Semiconductor industry, recruiting new talent and perspectives into the cluster. 

• Despite the high skills requirement, there is a gap in education and training providers offering these high-level skills. Level 4/5 skills, equivalent to first- and second-year universities, in Semiconductor Manufacturing, material characterization and quality assurance are not accessible enough across education providers. 

• Jess underscored that we need to create a sustainable skills pipeline. There are many hidden talent pools, of people looking to enter, re-enter, or upskill into exciting new industries. 

• Iungo facilitates a Semiconductor Skills Bootcamp, after which 8 in 10 secure employments within six months of completion. Recruiting, retaining, and upskilling a key to a seamless talent pipeline. 

• Jess concluded by emphasising that the future of Wales is bright; high public, private and academic collaboration, a resilient semiconductor supply chain, and opportunities for many high-skilled and well-paid jobs. 

Rodney Pelzel: 

Rodney is the CTO of IQE. His presentation unpacked why the compound semiconductor must be supported, outlining their critical role in the future. Slides available here.

• Compound semiconductors contain more than one element, leveraging their unique properties across elements such as Indium (In), Gallium (Ga), Aluminium (Al), Nitrogen (N), Arsenic (As) and Phosphorous (P). For specific use cases they can outperform silicon semiconductors, making them essential components in Electric Vehicles, Aerospace, IoT devices, and 5G communications. 

• As the UK heads towards delivering net zero and building a green economy, these semiconductors will provide the critical backbone of much of the key infrastructure, enabling the UK to compete for its stake in the global semiconductor supply chain that is projected to value $1 Trillion by 2030. Compound Semiconductors will also be required for much of the infrastructure needed to deal with the high computing requirements of AI. 

• Every single component of a fantastic ecosystem is in South Wales. World leading research, prototyping, routes to commercialisation and high-volume manufacturing. IQE was also a founding member of the cluster over 30 years ago, now home to the worlds most advanced epitaxy facility. This facility uses Compound Semiconductors as an enabling material with epitaxy wafers, in turn allowing for the lithographic designing of silicon chips. 

Panel: 

Our panel of industry experts discussed the origins of the South Wales cluster, R&D, manufacturing, the strengths of South Wales and the National Strategy. You can watch the full video here: 

We were thrilled to be joined by: 

Laura Foster, Head of Tech and Innovation, techUK

Dr Andy Sellars, Strategic Develpoment Director, CSA Catapult 

Chris Meadows, Director, Csconnected 

Jessica Leigh Jones MBE, CEO, iungo Solutions

Julie Fazackerley, CEO, Microlink Devices 

Caroline O'Brien, CEO, Kubos Semiconductors

  Watch the full video here:

Collaboration 

• IQE, Inmos, Swansea University and Cardiff University acted as a centre for the cluster to develop. Cardiff University and IQE frequently worked together, for example combining efforts to win European Horizon programme and Innovate UK bids. This ensured a close and mutually beneficial relationship from the onset, encouraging members of the industry in South Wales to approach opportunities together. The close relationship between academia and industry led to industry ready facilities, with concepts being developed by academia that are commercially viable. 

Manufacturing 

• South Wales offers a lot of accessibility to support manufacturing needs from start to finish. Open access facilities like the epitaxy manufacturing of IQE, allows the tools to process devices. This is fantastic for Fabless companies that may wish to produce one or two wafers but don’t want to invest in the capital-intensive equipment. This is also a crucial and attractive resource for SMEs and startups. 

R&D 

• Fabricating Compound Semiconductors is research intensive, meaning that links to Universities have been essential. The close relationship between academia and industry has also allowed universities to conduct research on industry standard tools, further bolstering the quality and scale of the R&D. The translation of research into a commercial product or services is one of the most important strengths within the cluster. 

Funding access remains an issue

• Long-term patient capital is needed given the very long development processes in the sector. To unlock further growth, long-term patient funding is needed, especially into hardware, which will be foundational in AI and other future technology like renewable energy. AI for example has very intensive computing requirements, with Semiconductor infrastructure crucial to enabling this growth. 

Wales and the National strategy 

• The strategy aims to focus in on the UK’s strengths, which is a sensible approach. However, given the disparity compared to other nations, this £1bn commitment must be leveraged strategically and effectively. The EU, US, China and Korea are all committing sums in the ten’s of billions and even hundreds of billions respectively. The UK Government must not be complacent, as this may lead to the UK and Welsh advantages being lost. 

Sector branding and engagement

• Semiconductor, engineering and science related skills are seen as inaccessible to many people. Even those in the industry sometimes frame the sector as being very technical or difficult, which may be off-putting future workers. Emphasising what the Semiconductor industry has to offer is important, for example the chance to work in cutting-edge and exciting technology. A positive impression must be established to both school students and young people, and those retraining.