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Semiconductors continue to add more value to Welsh economy

07th February 2022

Findings from new report shows growth in jobs and exports

A new report published by the Welsh Economy Research Unit at Cardiff University focuses on the contribution to the economy by the CSconnected semiconductor community during 2021.

As in 2020, and despite a complex economic backdrop dominated by COVID and Brexit, the compound semiconductor sector as a whole, out-performed the wider economy in a number of key areas including job growth and exports.

Exports from the sector bucked the overall trend that saw the value of Welsh exports tumble by around 25% over the three years to Q1 2021.

Employment in 2021 grew by around 14% year on year to around 1,600 full-time employees with the sector accounting for over 10% of Wales’ total employment in electrical and electronic engineering.

The report also identified that average gross pay across the sector was around 60% higher than the overall average pay in Wales.

Expansion plans already in announced across the industry provides strong indication that growth in employment is expected to accelerate with skills shortages in some parts of the compound semiconductor community becoming more acute.

The Welsh technology sector has out-performed the overall UK technology output over the last three years. The report suggests that that the relatively strong performance of compound semiconductor cluster in the 2019-2021 period reinforced this trend in the Welsh economy, in spite of poor overall trading conditions in much of Welsh manufacturing.

In terms of direct value to the Welsh economy, it is estimated that the sector directly contributed around £194M of Gross Value Added (GVA), representing around 1.7% of Welsh manufacturing GVA and around 15.4% of GVA in the more tightly defined electronic and engineering sector.

Taking into account, the cluster purchasing of regional goods and services, and its payment of wage incomes, it indirectly supports a further £83m of GVA so that the cluster overall supports directly and indirectly an estimated £277m of Welsh GVA.

Chris Meadows, CSconnected Director said:

“The Welsh compound semiconductor cluster is the first of its kind in the World. The region should be proud to be home to a robust and innovative technology sector that is widely recognised globally and enables a wide portfolio of applications from resilient communications to advanced healthcare technologies and energy efficient devices that will help achieve net-zero targets.

“The UKRI Strength in Places programme has enabled the CSconnected community to accelerate its global influence, placing Wales at the centre of new and emerging technologies that will change the way we live, work and spend our leisure time over the coming decades.”

Max Munday, one of the report authors said:

The robust growth of the compound semiconductor community continues to make a significant contribution to the Welsh economy and demonstrates resilience and sustainability that will be positive for the region’s long-term economic prospects. The growing ecosystem embraces the private sector firms, academic institutions and government agencies. 

“The UKRI Strength in Places support provides a great springboard for the region to be at the centre of the next technology revolution, increasing its contribution to the Welsh economy.”

The report was written by Professor Max Munday, Dr Annette Roberts and Professor Robert Huggins, Cardiff University.

The report can be downloaded and viewed at CSconnected.com.

About CSconnected

CSconnected is the collective brand for a growing number of advanced semiconductor related activities in Wales, home to a unique community of academic institutions, prototyping facilities and global, high-volume manufacturing capabilities that collaborate across a range of research and innovation programs. CSconnected is uniquely positioned to develop a global advantage in a sovereign, key enabling technology which will allow Wales and the UK to increase trade globally in critical sectors such as 5G communications, autonomous and electric vehicles, advanced medical devices, and consumer electronics of the future.

In 2020, CSconnected received government funding provided through UK Research and Innovation’s flagship Strength in Places Fund (SIPF). The 55-month CSconnected SIPF project has a total value of £43million, supported by £25million of UKRI funds. It builds on Wales's regional strengths and integrates research excellence with a unique regional supply chain in compound semiconductor manufacturing.

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