11 September 2017
Cardiff Capital Region, Welsh and UK Governments and IQE ratify development of Compound Semiconductor Foundry
Epiwafer foundry and substrate maker IQE plc of Cardiff, Wales, UK has hosted a signing ceremony between Cardiff Capital Region City Deal, the Welsh and UK Governments and IQE to ratify the development of the Compound Semiconductor Foundry, which will support the development of the CS Connected Cluster (which unites international businesses, policymakers and academics working on next-generation technology).
The project was formally confirmed in a signing ceremony at IQE’s headquarters in Cardiff by 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.
The signing 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 towards the establishment of a foundry, as an anchor in the region for high-end production of compound semiconductors.
The aim is to support the development of a compound semiconductor industrial cluster in the region, with the potential to:
- leverage £375m of private sector investment;
- create up to 2000 high skilled jobs;
- return the investment for use on other regional schemes; and
- create hundreds of further jobs in the wider supply chain cluster.
This is the first such investment since the £1.2bn CCR City Deal program was formally signed by the leaders of the ten local authorities in the region on 1 March.
The facility at Newport will be owned by the 10 Councils in the Regional Cabinet under the special-purpose vehicle CSC Foundry Ltd/LDC Ffowndri. The space will be leased to IQE for compound semiconductor manufacturing and applications development, helping the establishment of CS Connected (the world’s first compound semiconductor cluster) in the region.
The project is not a grant or a loan – it is a commercial investment, with ownership of the foundry shared between the 10 Councils. The proposal seeks to return the original investment plus interest over the life of the project.
The CCR City Deal seeks to position the region as the global leader in compound semiconductor-enabled applications, which was initiated by a £12m investment from the Welsh Government.
In 2016, the UK Government’s innovation agency Innovate UK announced a £50m investment to establish a new Compound Semiconductor Applications Catapult in South-East Wales (dedicated to developing compound semiconductor applications), build on existing investment by Cardiff University, IQE, and Welsh Government.
“The objective of this commitment is to create a complete compound semiconductor eco-system in South Wales to take advantage of the growing prominence of compound semiconductor technologies,” said Councillor Peter Fox, Leader of Monmouthshire County Council and Deputy Chair of the CCR City Deal Regional Cabinet. The establishment of the world’s first compound semiconductor cluster in South East Wales “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,” he added.
“Compound semiconductors are at the heart of many devices we use today, from smart phones to tablets and satellite communication systems. It is an area of UK strength and 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,” commented Secretary of State for Wales Alun Cairns. “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,” he added.
“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,” said Economy Secretary Ken Skates.
“This dedicated compound semiconductor facility between Cardiff and Newport will act as a key component of the burgeoning cluster that is already cementing Wales’ reputation for technology leadership,” believes IQE’s chief executive Dr Drew Nelson. “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,” he adds. “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.”