13 hours ago
- Business
- South Wales Argus
Plans to boost manufacturing and semiconductors in Newport
UK Business Secretary, Jonathan Reynolds, launched a fresh strategic approach for industry which has major benefits to Wales, the minister said. He has the backing of the UK Government's Secretary of State for Wales, Jo Stevens and local industry leaders in Newport.
The plan will see further subsidies for manufacturing that are high energy users and also a boost to the semiconductor industry, which is strong along the M4 corridor area in Gwent.
Other Welsh boosts, largely outside Gwent, will see cost benefits for defence, chemical and steel making, with further subsidised energy costs being offered. From 2027, electricity costs will be cut by up to £40 per megawatt hour for electricity-intensive businesses.
The Business Secretary has said the cash boost will help Welsh industry and attract new investment: "It will make existing Welsh industry a lot more competitive and attract new investment," he added.
Energy-intensive industries will get help from the British Industry Supercharger, which will use more taxpayers' money to increase subsidies in energy intense production. The subsidies will increase from 60 per cent to 90 percent in 2026.
The industrial strategy is a decade-long plan to 'make business cheaper and easier' and assist UK Government in its growth aims. The plan is to "make it quicker, easier and cheaper" to do business in the UK, he clarified.
The package for Wales will see a university-led growth in research into semiconductors, which will feed the Gwent-based manufacturers. The doctoral centre will be 'world- leading' and based in Swansea.
The funding will see £275million for skills and training in England and a related, so-called Barnett consequential funding for Wales. That funding will be at the heart of the strategy, it is claimed. Skills training is devolved to Wales and Wales ordinarily gets a bigger share of funding from what is called the Barnett consequential. This means Wales should get a bigger proportionate share for training than is available in England.
The Welsh Government can add to the sums and further boost work in education and training, which is already proportionately bigger in Wales's smaller and less competitive job market. However, adding to the sums is entirely the decision of the Welsh Government, Mr Reynolds has pointed out.
UK Secretary of State for Wales, Jo Stevens, said the industrial strategy was good for Wales and its businesses.
She added: "The strategy will support key sectors like compound semiconductors while developing industries of the future like floating offshore wind where Wales is well-placed to be a world leader.'
The strategy aims to harness an 'investment zone' around the semiconductor sector in Newport.
Dr Wyn Meredith, Chair of CSconnected, the collective brand for advanced semiconductor activities in South East Wales, said: "This announcement marks a major milestone in strengthening South Wales' position as a global leader in compound semiconductor technologies.
"The Cardiff Capital Region Investment Zone will support the growth of this strategically important industry, accelerating supply chain growth, workforce development programmes, and innovation to produce the products and services of the future. These factors are critical drivers for further job creation, inward investment and remaining globally competitive in this highly competitive global industry."
Michael O'Sullivan, Executive Vice President of Vishay, which operates the largest semiconductor factory in the UK based in Newport, said: 'This is a critical milestone for South Wales and the UK as a whole – a vote of confidence in the talented workers who have attracted investment from Government and companies across the globe.
"We know that the world class semiconductor cluster in South Wales has the expertise to meet the great challenges of our age – from Net Zero to the huge energy demands that will come from the growth of AI and electric vehicles.
'We plan to invest £250m, supporting 500 jobs to manufacture cutting edge compound semiconductors. These microchips with faster processing speeds will reduce energy losses and support advanced manufacturing industries from next generation wind turbines, data centres, to the latest electric vehicles and chargers.
'We look forward to working in partnership with leaders in the Welsh Government, Cardiff Capital Region and beyond to make the most of this opportunity for growth."
Welsh Labour ministers are expressing delight at recent events and are buoyed ahead of next year's Senedd elections by this news. The boost follows the recent spending review that saw £445million pumped into rail, bus, cycling and walking alternatives to the congestion on the M4.
Rebecca Evans, Welsh Government Minister for the Economy and Energy, has told media the boost is the result of the government partnership between the Senedd and Westminster.
A spokeswoman for Plaid Cymru said Wales is being short changed by Westminster again and will remain an afterthought in Labour's plans, which seem to centre on Senedd elections, not economic renewal.
Key factors for Wales:
UK Government to establish a centre for doctoral training in semiconductors, building on the world-leading cluster based in south Wales.
A Defence Growth Deal cluster to build on Wales's major strengths. The top five Ministry of Defence suppliers all have a presence in Wales.
A new British Business Bank champion for the Cardiff Capital Region to connect investors with businesses and kickstart growth.
£30m for a Local Innovation Partnerships Fund in Wales to work with the Welsh Government and Innovate UK to grow innovation.
The National Wealth Fund working with the Development Bank of Wales to identify and secure financing for investment projects in Wales.
Support for the UK's city regions and clusters by increasing the supply of investment sites through a new £600m Strategic Sites Accelerator.
Strengthened support from the Office for Investment to help identify, shape and deliver strategic investment opportunities.
