22 April 2021
Cardiff University report highlights resilience of compound semiconductor cluster during pandemic
A new report published by the Welsh Economy Research Unit at Cardiff University examines economic activity in Wales and the impact of the CSconnected compound semiconductor cluster (formed in South Wales in 2017), focusing on the contribution to the economy by the CSconnected consortia during 2020.
The report finds that, in the final quarter of 2020, CSconnected firms and organizations accounted for an estimated 1407 jobs, with private sector partners accounting for about £440m of sales, much of which (over 90%) related to overseas exports, mostly destined for markets outside the European Union (EU).
Employment within the compound semiconductor cluster has been stable in the challenging economic conditions during the global pandemic, with output largely maintained at a time when there has been a 9.9% contraction in UK economic activity in 2020 (the largest annual contraction on record).
Prospects in the cluster for 2021-22 are good, with increased vacancies and positive sentiment prevailing on business conditions, says the report. To meet growth expectations, CSconnected - in partnership with Cardiff University - has launched a co-ordinated mid-term skills development activity that will scale in line with cluster growth from 2021 to 2025.
The Welsh economy benefited from a contribution to gross value added (GVA) from CSconnected firms and organizations of an estimated £121.3m during 2020. Productivity in the cluster is one of its strongest points, it is reckoned. It is estimated that average GVA per employee in the cluster was about £86,000 in 2020 (more than double the Welsh average).
The report suggests that, after accounting for the role of the cluster in supporting local suppliers and household incomes, the economic contribution of the cluster to Wales grows to about £172m, with around 2100 full-time-equivalent jobs supported.
The report concludes that the resilience of the CSconnected community activity through the 2019-2020 period was very marked, with the cluster already showing excellent prospects for further employment and GVA growth in 2021-22.
“UKRI’s Strength in Places program has provided the CSconnected community in South Wales with a unique opportunity to align world-class academic research and core supply elements such as capital equipment and device packaging based in the region,” says CSconnected’s director Chris Meadows. “The project will accelerate Wales’ unique capability to be center stage at the forefront of new and emerging technologies. CSconnected aims to bring high-value-add manufacturing back to the UK and create significant jobs growth over the coming years,” he adds.
“The development of the compound semiconductor cluster is important for long-term economic prospects for the regional economy,” comments Max Munday, one of the report’s authors. “Critically, there is an evolving industry ecosystem in Wales that embraces the private sector firms, institutions and higher/further education colleges. The UKRI Strength in Places support is going to provide new opportunities to better embed cluster activity in the regional economy.”
The report was written by professor Max Munday, Dr Annette Roberts and professor Robert Huggins of Cardiff University and builds on their previous work developed to support the Strength in Places (SIP) Fund application process in 2019.