The compound semiconductor cluster in South Wales, spanning early-stage and academic research to commercial firms such as IQE and KLA, is targeting employment of more than 6,000 by 2030 and combined revenues of £1 billion.
This ambitious target follows new research highlighting the cluster's growing importance to the Welsh economy. Last year, it supported 3,140 jobs and generated an economic gross value added (GVA) of £436 million.
Cardiff University Report Findings
An independent report from the Welsh Economy Research Unit (WERU) at Cardiff University reveals that the cluster, known as CSconnected, directly employed 1,914 people last year, with an additional 1,226 jobs supported across Wales through 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 £267 million in direct GVA, with an extra £169 million supported elsewhere in Wales, bringing total Welsh GVA impact to £436 million, up 19% from 2024. This growth occurred during a period of global semiconductor volatility and continued pressure on UK manufacturing employment.
Expert Commentary
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 and Sales
Exports remain central to the cluster's contribution. Last year, companies operating within it, such as IQE and KLA, recorded £480 million in exports, representing approximately 2.8% of total Welsh goods exports. Annual sales reached £531 million.
Growth Since 2020
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%).
- Total Welsh GVA supported increasing from £172 million to £436 million (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 £567 million of GVA across the UK economy, up from £434 million 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.
UKRI Strength in Places Programme
Last year marked the completion of the original UKRI Strength in Places funding period for CSconnected. Over five years, the £43 million 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."
Ambition for 2030
Looking ahead, CSconnected's ambition to 2030 includes growing cluster revenues to £1 billion, 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."
