UK Research and Innovation Funding award to CS Connected represents huge boost to the Cardiff Capital Region

City Deal Projects

The UK Government has announced £25.4m in funding to CSConnected, a major project within the Compound Semiconductor Cluster (CSC) in the Cardiff Capital Region.

This funding represents a huge boost to the Cardiff Capital Region and reinforces its strategic focus on compound semiconductors.

The funding comes through UK Research and Innovation’s Strength in Places Fund and amounts to more than half the £43.7m project cost. Other funding will come from the Cardiff Capital Region City Deal, Welsh Government, Cardiff and Swansea Universities, IQE, SPTS, NWF, Microsemi, the CS Centre and the CS Catapult.

Compound semiconductors (CS) are at the heart of the Cardiff Capital Region City Deal’s strategy of building a more competitive, connected and resilient regional economy, built upon the sunrise industries of the future and creating the wealth to underpin shared prosperity and future growth.

The CSConnected project is based around integrating research excellence from the region’s universities with the region’s unique supply chains in advanced semiconductor manufacturing.

Compound semiconductors are critical components across a wide range of new technologies, and the primary aim of the CSconnected project is to develop a competitive advantage in key enabling technologies, which will allow the UK to increase trade globally in critical sectors such as communications, 5G, autonomous and electric vehicles, and medical devices.

CSConnected will also provide further downstream supply chain growth, start-up and spinout activity, and a general upskilling of the Welsh manufacturing base.

In economic impact terms, it is expected to provide a significant additional uplift to regional GVA over organic growth forecasts, delivering more than 1,000 additional high value jobs in the regional supply chain from 2025 onwards.

Cardiff Capital Region City Deal is investing £37.9m in acquiring and equipping the Compound Semiconductor Foundry in Newport, which is leased to IQE. This will help leverage up to £400m of private investment over the life of the project, to drive forward expansion and anchor the sector in the region.

The investment in the Foundry sits alongside £270m of strategically significant CS investments and assets already made in the region, which include:

  • the Institute of Compound Semiconductors – which focuses on early stage R&D and is a partnership between IQE, Welsh Government and Cardiff University;
  • the CSC Centre for Excellence – focusing on prototyping and a partnership with IQE and Cardiff University;
  • applications-based Catapult Centre – led by Innovate UK and located at IQE’s mega foundry in Newport;
  • Centre for Integrative Semiconductor Materials – a materials foundry at Swansea University.

Simon Hart, Secretary of State for Wales said:

“Our £44 million investment in the Cardiff University led project will boost the incredible research that is already taking place in this field across south-east Wales.

“Investing in this emerging technology will enable us to create a lasting engineering and manufacturing legacy in Wales, generating high-skilled jobs and economic growth as we emerge from the coronavirus emergency.”

Cllr Anthony Hunt, chair of the Cardiff Capital Region Regional Cabinet, said:

“We are building a world first here – a global cluster in the CS sector. This is an industry of the future and is significant in supporting growth in telecoms, 5G, communications, future energy systems, future automotive and med-tech.

“We are also building sovereign technological capability here in our midst. In the wake of Covid-19 we have been discussing the importance of localised supply chains. This will see us re-localise this significant high value supply chain and keep the benefits in the region, Wales and the UK.

“And crucially, this is significant for the whole of Cardiff Capital Region. While there may be a focus on Cardiff, Newport and Swansea as the centres of the cluster and home to the universities, the supply chains, high skilled workers and PhDs come from right across the region.” 

Kellie Beirne, Director of Cardiff Capital Region City Deal, said:

“This is an outstanding achievement against the backdrop of significant economic challenge – it is a symbol of hope in the opportunity that lies ahead. The CSConnected bid was one of 23 to be selected in the initial phase in March 2019. Following seed corn investment by Research England and Innovate UK, we submitted a business plan and now know we are one of seven successful bids across the UK.

“It is a real testament to the Regional Cabinet for backing the industrial cluster approach, which is recognition of both key business sectors and the importance of place.

“There will always be headwinds and cross currents in any commercial investment – we’ve had some and can expect more given the times we are in. But the Regional Cabinet has backed this, stood firm and not deviated. This sense of purpose and perseverance when it would be easy to be all things to all people is to be commended.”

Councillor Jane Mudd, Leader of Newport City Council, said:

“I am immensely proud that Newport is home to the next generation compound semi-conductor cluster of cutting-edge technology companies who are leading the way in this important field.

“I welcome this significant investment as a ringing endorsement of their innovative work. In the past, Newport’s economy was built on the industrial revolution, so it is fitting that its present and future is being forged by a technological revolution as we continue to develop the city as a digital hub.”


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