{"id":798281,"date":"2026-03-02T04:12:21","date_gmt":"2026-03-02T04:12:21","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/798281\/"},"modified":"2026-03-02T04:12:21","modified_gmt":"2026-03-02T04:12:21","slug":"op-ed-why-wales-holds-the-key-to-britains-industrial-future","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/798281\/","title":{"rendered":"Op-ed: Why Wales holds the key to Britain\u2019s industrial future"},"content":{"rendered":"

In this op-ed, CSconnected\u2019s Howard Rupprecht argues that the UK\u2019s industrial strategy hinges on semiconductors\u2014particularly compound semiconductors\u2014and urges the government to rapidly scale investment in South Wales\u2019 globally competitive cluster to secure sovereign capability, economic growth, and leadership in key technology sectors.<\/strong><\/p>\n

When the UK Government published the 10-year modern industrial strategy last November, they called it \u2018unashamedly long-term\u2019. A plan, they said, that would make the UK the best place to invest, build, and grow a business anywhere in the world. The plan identified eight growth sectors seen as most well-positioned to create the wealth, jobs, and higher wages needed in communities across the country. These sectors, seen as critical to national prosperity, economic security, resilience, net zero, and regional growth, were to be supported with the creation of the favourable conditions needed for businesses within them to emerge and scale, leaning into supporting already-established places and clusters across the UK.<\/p>\n

The foundational advanced technology supporting the industrial strategy<\/strong><\/p>\n

While each priority sector (the IS-8) has distinct challenges, five of the eight share a common foundation. They depend on semiconductors. From Advanced Manufacturing to Life Sciences, from Defence to Digital and Technologies, which includes AI to Quantum, the UK\u2019s ability to succeed in these sectors is inseparable from the semiconductor components that drive them. Quite simply, they are not just a strand, as positioned in the strategy itself; they are the frontier technology that will make the ambitions of the strategy possible.<\/p>\n

A Paper on Unlocking UK Economic Growth, published by The APPG for Semiconductors earlier in February, sets this out. Strengthening the UK\u2019s semiconductor ecosystem delivers a multiplier effect across the Industrial Strategy as a whole. Every sector plan depends on it. Every growth goal rests on it. Recognising and supporting this cross-cutting role is essential to the strategy delivering what it promises.<\/p>\n

Not all semiconductors are equal. The silicon chips that power everyday computing are vital, but they are not where the UK\u2019s competitive advantage lies, nor where the most strategically critical applications demand something more. Compound semiconductors, made from combinations of elements such as gallium nitride, silicon carbide, gallium arsenide, and indium phosphide perform in conditions and at speeds that silicon cannot match. Silicon carbide is the material enabling the power electronics driving the electrification of transport and energy infrastructure. Gallium nitride is the compound at the heart of high-frequency defence systems, radar, and electronic warfare.<\/p>\n

Competing in a trillion-dollar global race<\/strong><\/p>\n

The global semiconductor market is expected to be worth $1tn a year by 2030, driven by an explosive demand for AI infrastructure, electric vehicles, clean energy systems, and advanced defence capability. Despite being poorly understood, it is the technology market that almost every other technology relies on.<\/p>\n

Yet few nations have the infrastructure, skills, or depth of ecosystem to compete effectively on the world stage. The UK is one of these, alongside the US, the EU, China, Taiwan, Japan, and Korea. But while these global superpowers move at pace to scale, committing the major funds of US $52bn, EU \u20ac43bn, Taiwan $10bn, while the UK have committed modest funding of \u00a31bn to date as part of their UK Semiconductor Strategy allocation.<\/p>\n

With constrained public funding, the UK must concentrate investment where it already has a genuine, proven global advantage, doubling down on comparative strength to build the sovereign capability the Industrial Strategy demands.<\/p>\n

Introducing the world\u2019s first compound semiconductor cluster<\/strong><\/p>\n

The perfect opportunity to do this already exists. And it is built, operating, and growing here in Britain. South Wales is home to a compound semiconductor cluster, offering the only fully integrated semiconductor supply chain in the UK, and even the world.<\/p>\n

With cluster anchor companies including global players such as IQE, the world\u2019s largest manufacturer of compound semiconductor epiwafers, the foundational material from which compound semiconductor devices are made, KLA, one of the world\u2019s leading semiconductor process control companies which operates an R&D and manufacturing centre in Newport. Alongside Vishay, whose facility is the largest compound semiconductor manufacturing site in the UK, to which they have recently committed \u00a3250m. Microchip Technology and the Compound Semiconductor Applications Catapult, responsible for mobilising the UK Semiconductor Centre under the Semiconductor Strategy, with lab facilities and research across Cardiff and Swansea universities available to the cluster.<\/p>\n

The Industrial Strategy itself acknowledges the value of cluster co-location, and South Wales answers this call directly, offering a density of universities, R&D infrastructure, anchor businesses, supply chains and specialist skills. They are all established and already scaling, ready to accelerate production of the frontier technology of the Industrial Strategy.<\/p>\n

Leaning into ten years of investment in specialist infrastructure<\/strong><\/p>\n

Semiconductor research and manufacturing infrastructure is particularly difficult to replicate. Highly specialised, large-scale ultra-clean and environmentally stable facilities are required to house high-value capital chip fabrication tools. The specialist cleanroom and fab infrastructure at the Centre for Integrated Semiconductor Materials at Swansea University and the Institute for Compound Semiconductors at Cardiff University represent a \u00a3200M investment in new-build facilities and equipment. The highly specialised laboratories at the Compound Semiconductor Applications Catapult in Newport contain cutting-edge chip test, characterisation and module assembly equipment. Collectively, these facilities offer semiconductor companies locating to South Wales open access to unique capabilities they would otherwise have to fund entirely by themselves. \u00a0That shared infrastructure model is a significant competitive advantage for the cluster and is accelerating the growth of a high-tech SME ecosystem around the large-scale industrial core.<\/p>\n

Powered by a generation of talent<\/strong><\/p>\n

South Wales has a generation of compound semiconductor engineers, technicians, process specialists, and researchers who trained, who work, and who have established lifestyles within the region. This not only means rewarding, well-paid careers for them in the area they call home, but it also means that the highly specialist skills required for compound semiconductor manufacturing are readily available in the region. This is bolstered further by the cluster\u2019s skills pipeline, which extends from vocational and apprenticeship routes through to postgraduate research.\u00a0CSconnected,<\/a>\u00a0the not-for-profit body that convenes the South Wales compound semiconductor cluster, is actively closing the skills gap further with a skills development programme to deepen and broaden that pipeline, collaborating with Cardiff and Swansea universities to provide continuous specialist talent into cluster companies. The region\u2019s ability to recruit and retain this talent locally is one of the primary reasons global companies continue to choose South Wales over competing locations in Germany, the Netherlands, and the United States.<\/p>\n

A supply chain that is being built, not borrowed<\/strong><\/p>\n

Perhaps the most telling indicator of a cluster that has reached genuine maturity is what happens around its edges in the network of suppliers, service providers, and specialist businesses that grow up to support its anchor companies. A cluster that depends entirely on imported components and overseas suppliers is an outpost. A cluster that generates its own supply chain is a self-sustaining industrial ecosystem.<\/p>\n

South Wales is actively building the latter. CSconnected\u2019s Supply Chain Development Programme, backed by \u00a31m in funding from Cardiff Capital Region and launched in March 2025, is systematically mapping the procurement needs of the cluster\u2019s major companies, identifying where domestic suppliers can meet those needs, and funding the capability upgrades required to close the gaps. In less than a year, the programme has engaged more than 40 suppliers and has five active development projects running simultaneously.<\/p>\n

Philtronics<\/a>, a South Wales electronics manufacturer, has developed new capabilities that have allowed it to become a direct supplier to KLA, keeping procurement spend within the regional economy that would previously have gone overseas.\u00a0Pegasus Chemicals<\/a>\u00a0has undergone a capability upgrade that positions it to serve the cluster\u2019s specialist materials requirements.<\/p>\n

A return on investment which is already measurable<\/strong><\/p>\n

The cluster generates \u00a3150,061 of GVA per employee, which compares incredibly favourably against typical UK manufacturing, which sits at around \u00a355,000\u2013\u00a365,000. The compound semiconductor cluster is running at roughly two and a half times the national manufacturing average, a productivity premium that, if replicated at scale, would represent one of the most significant contributions any single UK industrial cluster could make to the government\u2019s growth mission. This is not a sector asking to be subsidised into competitiveness. It is a sector already operating at world-class productivity levels, asking for the investment needed to grow.<\/p>\n

A ten-year track record of impact<\/strong><\/p>\n