To shape the competitive age, and possess sovereign capability, we must innovate – consistently and constantly. Back in 2016, when I first encountered the work of a handful of next generation compound semiconductor companies in the region, what struck me most was its potential to build a new kind of economy. Once at the forefront of industrialization, our resources sparked progression across the modern world – and once again, I felt, we could be at the front of new, contemporary industrial strategy.
A sector that seemed to be thinking about it all – and really challenging some of the traditional paradigms around how we thought about energy, transport, skills and competitiveness. As an underpinning and ubiquitous technology – needed by everyone and embedded in nearly every connected device I could think of – it quickly became clear this was a cluster around which, the Welsh economy could build.
It’s hard to believe that was almost a decade ago. I remember because it coincided with us shaping and making the case for what became the Cardiff Capital Region City Deal. From the outset, compound semiconductors stood was a modern beacon industry – a foundation stone. The evidence was compelling: this was a frontier economy – innovation-led, R&D intensive, and deeply connected to global markets – the latter in particular, making for an interesting ride. It could create high-value jobs, anchor advanced manufacturing in our region, and position Southeast Wales at the heart of a global industry. Perhaps most important of all, its supply chain was extensive, embedded across all parts of the region and offering opportunity for distributed impact and inclusive growth.
When IQE brought forward its proposal to expand wafer production for a major customer in the United States, it offered exactly the kind of opportunity CCR’s political leaders were eager to support. Working together, we were able to invest through the City Deal in the fit-out of the old P&T building at Imperial Park in Newport – a building that had long symbolized unrealized potential. Today, with the Foundry building housing the Compound Semiconductor Applications Catapult and neighboring the brand-new state of the art UK base for KLA – all alongside new data center growth, further underlining the wide applications base of the sector – you can’t help but feel a palpable buzz in air at Imperial Park.
That project became the model for how we wanted to work, focusing our support on high-order and high-impact opportunities that could drive long-term sustainable growth. With a relatively small pot of investment, smart specialization and having a strong sense of priorities and focus, felt like the obvious path. Since then, Cardiff Capital Region has continued to back the cluster’s development, from early support of UKRI’s c£43M Strength in Places programme, to investment in KLA’s major expansion. These are companies paying salaries that are worth double the Welsh average and proving that advanced manufacturing has a lasting future here.
What’s equally important is how this success reaches beyond the M4 corridor. One of KLA’s largest regional suppliers is Philtronics, an amazing company located in RCT – a reminder that high-value impact has a place in all parts of the region. The emerging Investment Zone centered on Newport and Cardiff, but with a radius into the hinterland and a focus on this critical enabling technology – gives us the chance to extend that impact even further, building resilience and heightening relevance across med-tech, creative industries and energy systems
It's not all plan sailing though. Every time we feel the headwinds of supporting such a critical tech industry that has a global footprint, international supply chains and major end customers, we have to remind ourselves that major geopolitical changes and forces are at play. Does that mean though, we should run in the other direction and back something more secure and impervious to these shifts – that’s if these obvious safer bets even exist? In an age of sovereign capability and so-called national economic security this is no time for us to be walking away from clear strengths and sectors in which we are equipped to lead and not just follow. The right things are rarely the easy things.
Also, because alongside the global opportunity sits a local responsibility. The strength of this sector depends on people – on the skills, curiosity and ambition of the next generation. That’s why outreach work which is happening across schools is so vital. It’s about helping young people, especially young women, see that the physics and engineering they study can lead to world-class careers here in Wales – better jobs close to home so our talent doesn’t feel it has to leave Wales to prosper and make good lives. It’s also about creating an import value – talent being attracted to our region because we have great jobs, amazing learning opportunities and a highly livable environment.
The wider cluster now reflects that same ambition. From the early partnerships that formed around IQE and Cardiff University to the broader network of firms that includes Space Forge and Rolls-Royce Submarines, we’ve seen how innovation breeds momentum. This cluster hasn’t just grown an industry; it has shaped a model of collaboration and challenge-driven investment that’s influencing national policy.
There will always be global pressures and competitive challenges, but the foundations here are strong. The combination of vision, partnership and long-term commitment via CSconnected has given South Wales a genuine leadership role in a strategically vital industry. When I see cranes over Imperial Park, new facilities taking shape, and people speaking with pride about what’s happening in their region, it’s clear that this is more than an industrial success story. It’s a story about renewal – about what happens when a region believes in its strengths and works together to realize them.
Kellie Beirne talks about this and more in the CSconnected podcast. Listen here.
