A £38 million deal to put Wales on the global technological map has been signed.
The ten councils that make up the Cardiff Capital Region City Deal, which includes Caerphilly, have bought the former LG Semiconductor site at Newport’s Imperial Park from the Welsh Government.
It is hoped the site, which is being leased by Cardiff-based tech firm IQE, will become the world’s first compound semiconductor ‘cluster’, attracting other firms developing the technology and eventually creating 2,000 new jobs.
Compound semiconductors are more complex than silicon technology and offer lower power consumption, higher operating speeds and temperatures, light-emitting and detecting properties.
These properties are opening up significant markets in the automotive, health and security sector not least in helping deliver 5G smart phones, the Internet of Things, tele-health and autonomous driverless vehicles.
Dr Drew Nelson, Chief Executive of IQE, said: “Compound semiconductors are rapidly defining 21st Century technologies and Wales is uniquely positioned to be centre stage of this global, high-tech industry sector.
“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.
“The initiative is a shining example of what can be achieved through collaboration. The Welsh and UK governments, along with the ten 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.”
It is the first investment under the £1.2bn Cardiff Capital Region City Deal programme and the £38m spent has the potential to bring in a further £375m of private sector investment.
The Welsh Government has already spent £12m on the cluster project and the UK Government has spent £50m.
The proposal seeks to return the original investment plus interest over the life of the project.
Economy Secretary Ken Skates AM said: “It is hugely encouraging that Welsh Government’s initial £12m investment in developing the cluster back in 2015 has been the catalyst for the 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.”
Secretary of State for Wales Alun Cairns said: “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.”