Strengthening the world’s first CS cluster
Underpinning recent success in the South Wales cluster is a five-year programme backed by £43 million. It’s supported the scaling of epitaxy to 200 mm, a new power electronics capability, and the construction of a robust talent pipeline.
BY WYN MEREDITH AND CAMILLE COLOMBIER FROM CSCONNECTED
Clusters don’t get built overnight. It has taken decades of devoted effort for the South Wales compound semiconductor ecosystem to reach a point where complementary companies, universities and government partners operate within a few miles of each other – IQE, KLA, Vishay Newport, Microchip, MicroLink Devices UK Ltd, and Cardiff and Swansea Universities. But proximity alone doesn’t make a cluster. Also crucial is the connective tissue: shared infrastructure, coordinated R&D, and the depth of trust that only comes from working together over time.
These factors have been energised by the Strength in Places Fund (SIPF). Providing £43 million of investment over six years, it has produced results that are measurable at every level, from 200 mm GaAs VCSEL epitaxy to the inception and introduction of a SiC power module pilot line.
The South Wales cluster has a number of significant industrial players, all with a rich heritage. They include: IQE, the global leader in compound semiconductor epitaxial wafers; KLA, a world-leading manufacturer of metrology, inspection and wafer processing equipment that opened a purpose-built facility in Newport last year; Vishay Newport, the UK’s largest semiconductor fab; and Microchip, which has a site in Caldicot that’s operated in the semiconductor sector for decades. In addition, there’s a strong research infrastructure, as the cluster is home to Cardiff University’s Institute for Compound Semiconductors and Swansea University’s Centre for Integrative Semiconductor Materials (CISM). The SIPF programme has strengthened the cluster by providing the framework to ensure that collaboration becomes a natural instinct across the ecosystem.
Note that this programme, running from 2020 to 2026 and backed by UK Research and Innovation, has not been focused on creating a cluster. It was already there. The goal has been activation: taking the geographic concentration of compound semiconductor expertise in South Wales and turning it into a functioning, coordinated ecosystem with shared infrastructure, joint R&D programmes, and the trust and collaborative practice that’s only realised with sustained co-investment.
Semiconductor cleanroom with integrated process tools for wafer fabrication.
The right foundation
If compound semiconductor manufacturing ecosystems are to excel, they must include physical infrastructure that individual companies are unable to justify building and maintaining alone. To bridge that critical gap, UKRI has invested directly in open-access capability across the region, specifically designed to service an extended supply chain from materials development to module-scale manufacturing. At the heart of this strategy, Imperial Park in Newport now houses IQE, KLA and the Compound Semiconductor Applications Catapult in a purpose-developed advanced manufacturing environment. This co-location of epitaxial wafer production, process equipment development and applications prototyping fosters close interaction between equipment developers, material producers and device engineers – something that is harder to realise in more distributed industrial settings.
Less than 10 miles from Imperial Park is Cardiff University’s Institute for Compound Semiconductors. Located within the university’s Innovation Campus, it has cleanroom facilities and characterisation capability that supports academic research and industry-facing technology development. Complementary expertise comes from Swansea University’s CISM, which focuses on wide-bandgap materials, including SiC and GaN, critical for power electronics applications.
Providing a translational bridge between the companies and the universities within the South Wales cluster is the Compound Semiconductor Applications Catapult. This entity ensures that research outputs become manufacturable processes and commercially viable technologies – this is often the most challenging transition in any advanced materials programme.
Complementing this infrastructure is Centre 7, a 51,000 ft2 facility at Cardiff Gate, acquired by the Welsh Government as part of its international strategy to attract inward investment into the cluster. Designed as a flexible landing space for semiconductor companies, it provides a combination of lab-enabled environments, office space and collaboration facilities that lower the barrier to entry for organisations looking to establish a presence in South Wales. With early tenants including CSconnected and MicroLink Devices, and further companies expected to follow, Centre 7 plays a distinct role within the ecosystem: as a point of entry and expansion for SMEs and international partners, helping to translate the cluster’s global reputation into tangible business activity on the ground.
Heatmap showing the concentration of compound semiconductor activity across South Wales.
Four R&D programmes
At the technical heart of the SIPF initiative is four major collaborative R&D programmes, each targeting a distinct but interrelated challenge. These programmes focus on: next-generation optical communications and sensing; large-scale GaAs-based wafer manufacturing; the development of novel, more-efficient compound semiconductor wafer fabrication tools; and the introduction of advanced processes, for 5G and electric and autonomous vehicle systems. Together, these four workstreams are addressing the ‘full vertical’, from materials production through to process tooling and device-level applications – and are mapping directly onto the markets that will define compound semiconductor demand through the next decade.
Scaling epitaxy
Perhaps one of the most technically significant deliverables of the SIPF programme is IQE’s successful scale-up of InP epitaxy from a starting point of 3-inch and 4-inch wafers to full 6-inch (150 mm) production. Success has required complete process redevelopment, equipment adaptation, and extensive qualification. IQE was the first in the industry to demonstrate this important capability that is now delivering material quality and uniformity equal to, or better than, established 100 mm lines, enabling IQE to supply the next generation of optical devices produced on large-diameter 6-inch wafers to meet future hyperscale datacentre demand.
In addition, the programme enabled the demonstration of the world’s first commercially available 8-inch (200 mm) VCSEL epiwafer, announced by IQE in 2022. The SIPF programme has enabled IQE to invest strategically in advancing its 8-inch platform, supporting the continued expansion of compound semiconductor applications.
Independent validation of device performance has come through collaboration with Cardiff University, with IQE retaining proprietary manufacturing know-how. When markets in AI/data centres, 3D sensing, lidar, and silicon photonics move to larger wafers – a migration that will certainly happen, with timing dictated by economics of scale – the South Wales cluster will be positioned to respond at commercial speed.
Tools and processes
KLA’s participation in the SIPF programme highlights the cluster’s strength and appeal across the semiconductor value chain. Supported by SIPF, KLA has made substantial advances in GaAs VCSEL etching, InP processing and, GaN etch solutions, including hardware improvements.
Critical to success has been access to large volumes of epitaxial material, beyond what customers typically supply for process development. Being part of the cluster has enabled access to more material, and engineers have gained deep insight into layer behaviour across a wide parameter space. Drawing on this, processes have been refined, and now provide improved uniformities, tighter profile control, and superior management of complex aluminium-containing layers that are notoriously difficult to etch predictably. During the programme, developments reached technology readiness levels appropriate for commercial deployment.
Building the pipeline
While physical infrastructure and R&D capability are necessary for a sustainable cluster, they alone do not guarantee success. That’s because the compound semiconductor sector is skills-intensive, needing talent pipelines that take years to build. To strengthen these pipelines, CSconnected and SIPF have invested across every level, from primary school engagement to postgraduate research training that’s directly connected to industry needs. In 2025 alone, SIPF-backed activity reached between 12,000 and 13,000 individuals across South Wales, predominantly through school-based programmes, with structured engagement running from primary school all the way through to college, university and adult professionals.
The SIPF, along with the Cardiff Capital Region, has jointly funded the flagship ‘Sparking STEM Futures’ initiative, managed by CSconnected. Starting in January 2024, this has reached more than 23,000 people across South and West Wales. Delivered through a coordinated network of regional education providers, this programme has introduced young people to compound semiconductors through hands-on, curriculum-linked activity at primary and secondary level. This April, a new interactive semiconductor exhibit opened at Techniquest, Cardiff’s primary science engagement centre, providing a permanent public-facing asset that continues to deliver value beyond the programme’s lifetime.
The CSconnected SIPF project has also supported the development of new semiconductor-specific qualifications at secondary school and technical college level, including teacher-training programmes to support delivery. The cluster’s workforce data reflects this sustained investment: 19 percent of non-university cluster employees are engaged in R&D, average salaries sit at approximately £66,000 and the proportion of employees qualified to degree level ranges from 43 to 85 percent across private sector cluster firms.
Student engaging with virtual reality technology during a CSconnected outreach activity.
What the data shows
Five years of support from SIPF has delivered measurable results. The total number of jobs across Wales supported by the activity of the cluster has climbed from 2,085 in 2020 to 3,140 in 2025, representing growth of just over 50 percent. That’s an increase of more than 1,000 over a timeframe when Welsh manufacturing employment as a whole has fallen from 142,000 to 133,000.
The cluster has also made a substantial, growing contribution to the UK economy. Between 2020 and 2025, its direct contribution has grown from £172 million to £267 million, and reached £436 million when including supply chain and wage-spending effects. Last year exports totalled £480 million, accounting for more than 90 percent of industrial output.
Looking forward
While the CSconnected SIPF project ends this year, the cluster it has helped to build will continue to go from strength to strength. Ambitious targets have been set for the next phase: £1 billion in cluster revenue; and a community of 6,000 people within five years, with a continued focus on developing local talent. Technically, the priorities are already clear. The markets compound semiconductors will serve over the next decade – 6G infrastructure, automotive power electronics, renewable energy systems, and AI photonics and optical interconnects – are placing new demands on materials, processes and device architectures. Aligning directly with these demands are the technical outputs of the cluster, realised during the support of the SIPF programme.
In 2027, South Wales will host the International Conference on Silicon Carbide and Related Materials (ICSCRM). Co-organising this is CSconnected and Swansea University, with Vishay Newport providing the principal sponsor. ICSCRM will bring the global SiC research community to the cluster for the first time. It is a marker of how far the region has come, and an indication of its ambitions for tomorrow.
