In this exclusive op-ed for The Manufacturer, Prof. Wyn Meredith, Chair of CSconnected and founding director of the Compound Semiconductor Centre, argues that the UK’s compound semiconductor industry—anchored by South Wales’ CSconnected cluster—is a globally significant driver of innovation, jobs, exports, and economic growth, but requires urgent, sustained investment and government support to secure the nation’s competitive future.
Since the COVID-19 pandemic, we’ve been hearing more about the semiconductor industry than ever, but this industry has driven advances in modern tech since the 1960s. The industry currently represents a $700bn opportunity, forecasted to exceed $1tn pa in 2030. Silicon chips are the building blocks of computation and, by some estimates, have been responsible for driving >40% of global productivity during the last two decades.; but are not the full story. Compound semiconductors are materials that are manufactured from more than one chemical element. Due to their inherent physical properties, compound semiconductors enable faster, more efficient, more functional electronic devices, powering everything from AI to advanced medical devices and defence applications.
The UK has a rich history in research, innovation and manufacturing of advanced compound semiconductor components. This article is a call to action. We need to recognise, support, and invest in a sector that is not only transforming global industries but also delivering high-value jobs, regional growth, and national resilience, while fuelling growth in clean manufacture.
A world without compound semiconductors?
A world without compound semiconductors would be like stepping back in time, they are integral to practically all modern tech appliances:
- AI and machine learning: high-speed, energy-efficient laser chips enable ultra-fast fibre-optic data-communication that is essential for real-time data processing and model training.
- Advanced healthcare: from diagnostic imaging to wearable sensors, compound semiconductor based photonic sensors power next-gen medical devices.
- Quantum Photonics: compound semiconductors play an enabling role in emerging technologies for secure communications and advanced sensing.
- 5G and beyond: efficient operation at extended radio frequencies enable ultra-fast, low-latency wireless networks.
- Net Zero technologies: Silicon carbide (SiC) and gallium nitride (GaN) devices are revolutionising high voltage power electronics in EVs and renewable energy systems.
Compound semiconductor chip production is key to so much of our daily life and supply shortages can cause delays in product supply chains, price rises, potential disruptions to essential infrastructure and risks to national security. This is fundamentally why the manufacture of this technology must be prioritised in the UK, alongside research, design and innovation.
A first of its kind
At the heart of this growing UK industry lies South Wales. The region is home to the world’s first compound semiconductor cluster, CSconnected. The unique and innovative cluster brings together advanced semiconductor activities, combining academic excellence, prototyping, and global manufacturing to drive innovation in critical technologies
There’s no question about the importance of the industry, in 2024 alone, this globally unique cluster contributed £434m in Gross Value Added (GVA) to the UK economy.
Just some of the core partners in the cluster include global businesses IQE and Vishay, alongside academic leaders Cardiff University and Swansea University, among many others. This alignment across the entire supply chain, from research and development (R&D) and design to manufacturing, has created a thriving community that is not only advancing technology, but also creating long-term economic value in the region and beyond.
South Wales is enabling the UK to compete on the global stage in a sector of growing strategic importance.
Unlike the broader chip design hubs, which face intense global competition, CSconnected’s strength lies in its deep specialisation in compound semiconductors, a field where the UK leads and can truly differentiate.
As the world’s first compound semiconductor cluster, CSconnected is not only advancing cutting-edge technologies but also delivering real economic impact, creating high-value, diverse jobs and strengthening local communities.
The economic impact
The CSconnected cluster is a powerful economic driver:
- £434m GVA to the UK in 2024, up from £255m in 2020.
- 3,000+ jobs supported in South Wales, with an aim of doubling this by 2030+.
- £466m in exports, representing over 90% of output.
- £67,765 average salary
- For every job in the cluster, 1.24 additional jobs are supported across the UK, totalling over 4,000 UK jobs.
The above data demonstrates the value of the compound semiconductor cluster, not just to Wales, but across the United Kingdom.
How can the UK maintain this growth?
To build on this success, the UK must treat the compound semiconductor industry as a strategic priority. Sustained investment and commitment will help fuel the skills development and infrastructure needed to maintain momentum.
A prime example is the £250m investment by Vishay Intertechnology into Newport Wafer Fab, the UK’s largest semiconductor facility, which is set to bring skilled job opportunities across a broad range of skills, including manufacturing and engineering, to South Wales. Vishay’s investment is expected to directly support over 500 high value, high skilled jobs in the region and indirectly support hundreds more in the wider supply chain.
Recently, the UK Government has pledged to grow its annual R&D spend by £2.26bn annually by 2030, which we hope will include funding into the compound semiconductor industry. There’s also been a commitment to an £86bn boost to science and technology, which should give regions the power to carry out important and innovative research.
This is a great step, but to truly unlock the potential of this increased investment, it must be able to flow across the entire lifecycle of semiconductors including manufacture and the accompanying supply chain.
One example of this kind of targeted support is the Supply Chain Development Programme, launched by CSconnected and supported by Cardiff Capital Region. The initiative is already helping strengthen critical links in South Wales’ semiconductor ecosystem by funding collaborative projects that enhance manufacturing capabilities and supply chain resilience.
The UK may not have the same financial firepower as the US or the EU when it comes to semiconductor subsidies, but there are a number of strategic benefits that can be enhanced and optimised with effective investment:
- A highly skilled workforce trained in clean, high-value manufacturing roles.
- World-class research infrastructure to support compound semiconductor innovation.
- Scale-up and manufacturing facilities which drive local value-capture across the supply chain, creating greater prosperity from British innovation than merely receiving design royalties.
What now?
The UK has a once-in-a-generation opportunity to lead in compound semiconductors. The CSconnected cluster has laid the groundwork, but real progress demands bold collaboration and sustained investment from central government.
If we are serious about future proofing the UK economy, we cannot ignore the role of compound semiconductors. It’s not just chips, it’s skills, infrastructure and jobs that will define our global competitiveness. Industry leaders, investors, and policymakers must come together to secure the UK’s place at the forefront of this critical sector. The world isn’t waiting, and neither should we.
About the author
Prof. Wyn Meredith is a leading figure in the UK’s semiconductor sector and Founding Director of the Compound Semiconductor Centre. With a PhD in blue laser development and decades of experience across industry and academia, he champions strategic investment and innovation in South Wales, helping shape national semiconductor policy and infrastructure.
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