The South Wales compound semiconductor cluster targeting 6,000 jobs by 2030

The economic impact of the cluster has been assessed in a new report from Cardiff University

The compound semiconductor cluster in South Wales, from early stage and academic research to commercial firms such as IQE and KLA, is targeting employing more than 6,000 by 2030 and generating combined revenues of £1bn.

The ambitious target for the cluster comes after new research shows its growing importance to the Welsh economy, with it last year supports 3,140 jobs and generating an economic gross value added of £436m.

An independent report, from the Welsh Economy Research Unit (WERU) at Cardiff University, shows that the cluster – known as CSconnected – last year directly employed 1,914 people, with a further 1,226 jobs supported across Wales through its wider economic indirect and induced impacts.

Total Welsh employment linked to the cluster increased from 2,748 in 2024 to 3,140 last year, a 14% year-on-year rise.

The sector generated £267m in direct GVA, with an additional £169m supported elsewhere in Wales, bringing total Welsh GVA impact to £436m, up 19% on 2024. This growth has been achieved during a period marked by global semiconductor volatility and continued pressure on UK manufacturing employment.

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Professor Max Munday of Cardiff University, lead author of the report, said: “The compound semiconductor cluster continues to show resilience and sustained growth. While other parts of manufacturing have faced considerable challenges, this sector has expanded employment, increased productivity and strengthened its wider economic contribution. The modelling shows both direct growth and a deepening of economic effects across Wales.”

Exports remain central to the cluster’s contribution. Last year companies operating in it, such as IQE and KLA, recorded £480m in exports – representing approximately 2.8% of total Welsh goods exports. Annual sales reached £531m.

Since 2020 the report shows that the cluster has:

• Seen average salaries remain high at approximately £66,000, well above the Welsh average, with more than 95% of employment full-time:
• Total Welsh jobs supported by the cluster rising from 2,085 to 3,140 ( up 51%); and
• Total Welsh GVA supported increasing from £172m to £436m ( up 153%).

While the cluster’s core footprint is in South Wales, its economic footprint extends across the UK. In 2025 activity linked to the cluster supported £567m of GVA across the UK economy, up from £434m in 2024 (+31%).Each direct job in the cluster now supports a further 1.29 jobs across the UK, contributing to a total of 4,392 jobs nationwide.

Last year marked the completion of the original UKRI Strength in Places funding period for CSconnected. Over five years, the £43m programme has strengthened collaboration between industry and academia, supported investment and accelerated cluster growth.

Professor Wyn Meredith, Chair of CSconnected and the SIPF programme, said “Five years on from the launch of the Strength in Places investment, the results are clear. Employment has grown, productivity has increased and the cluster’s economic impact has nearly doubled. We’ve built a stronger and more connected cluster, with real economic impact across Wales.”

Looking ahead CSconnected’s ambition to 2030 includes growing cluster revenues to £1bn, expanding skilled employment to 6,000 people, and capturing greater value across the regional supply chain.

Howard Rupprecht, managing director of CSconnected, said:“The progress we’ve seen over the past five years gives us a strong foundation for the next phase. Our focus now is on scaling capacity, strengthening regional supply chains and developing the skills needed to support long-term growth. The opportunity ahead is significant, and we want to ensure Wales captures as much of that value as possible.”