Facing industrial decline, Wales dreams of Silicon Valley

A ‘wafer’ in a sterile room at IQE’s plant in Newport. Experts believe that Newport can become a new Silicon Valley. (AFP)
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Updated 23 December 2019

Facing industrial decline, Wales dreams of Silicon Valley

  • In Newport, a handful of semiconductor manufacturers eye a new center to attract investment

NEWPORT: Wales is better known for its factory closures than high-tech achievements. But in Newport, a former bastion of the coal industry, a handful of semiconductor manufacturers dream of a new Silicon Valley.

“We want to be this technology center like Silicon Valley, where we can attract whatever the big names of tomorrow are,” said Chris Meadows, corporate systems manager at British firm IQE. “Hopefully it will be whatever the 2030 version of Google is or a Facebook.”

IQE is one of a small group of local companies, also including SPTS or Newport Wafer Fab, which have formed an alliance with universities to create a compound semiconductor “cluster” in south Wales.

Meadows said his firm and SPTS began working together after they discovered they had the same customer in Taiwan, using them at different points in their supply chain.

“We realized we can offer a better service if we partner,” he said.

Silicon semiconductors are used extensively in electronic circuits, but new innovations require new enabling technology.

Made from a combination of materials such as silicon and carbon (silicon carbide) or arsenic and gallium (gallium arsenide), compound semiconductors offer superior properties in terms of power, heat and shock resistance.

They are more complex and more expensive than silicon chips, but are more suitable for electric vehicles, laser devices or 5G telephony.

In the sterile offices of IQE, the machines silently cut slices of semiconductors — “wafers” — as a few technicians in overalls and masks come by occasionally to check the screens.

“That’s where the magic happens. It’s like with cooking — everybody can have an oven and a recipe but not everyone is a five-star chef,” said Meadows.

“Our know-how, our edge comes from that particular way of working out and assembling wafers. It’s our secret recipe.”

Working together, firms in the Newport “cluster” can offer custom-made products for chips used in devices by clients such as Philips or Raytheon, and maintain control over the production line.

“America, Europe, we’ve all kind of stepped back from manufacturing almost as if it is a dirty thing,” Meadows said, noting that this has benefited Asia.

But now “it’s more about machinery and intellectual property” — and that brings high-skilled, well-paid jobs to a region that has suffered industrial decline.

Around 1,400 people work for the cluster, but it hopes to have 5,000 by 2023 thanks to the growth of a global market that last year was worth $77 billion.

The next step for Newport is to produce their own integrated circuits, and that will bring more jobs.

“We currently have three companies that we’re working with, two in North America and one in China ... they’ll be assembling the electronic products using chips made within the cluster,” Meadows said.

In the cluster, manufacturers delegate research and innovation to the universities of Cardiff or Swansea. The prototypes are managed by government organizations that invest in new technologies, the so-called catapults.

Andy Sellars, chief business development officer at the compound semiconductor applications catapult, notes a project with McLaren worth around £20 million.

There is in total “about £300 million of investment in this region on the next generation of semiconductor material,” he added.

The cluster is a long way away from replacing the thousands of jobs lost in Wales over the last few decades with the closure of a string of factories, including Ford at Bridgend.

“Is it enough to replace the lost jobs? No it’s not,” admitted Heather Myers, CEO of the South Wales Chamber of Commerce.

“But it is an answer showing that when you collaborate you can make an impact.”

Automechanika Riyadh opens, featuring leading global suppliers

Updated 25 February 2020

Automechanika Riyadh opens, featuring leading global suppliers

  • Saudi auto deals grew 40 percent last year with influx of female buyers

RIYADH: Leading names in the global auto services industry are out in force at Automechanika Riyadh — which opened on Monday at Al Faisaliah Hotel — vying to increase their share of a growing market expected to reach a value of $10.15 billion by 2023.

Automechanika Riyadh is the regional arm of the world’s largest trade fair, congress and event organizer, Messe Frankfurt, which has licensed the Automechanika brand to event organizer Al Harithy Company for Exhibitions (ACE) Group.

Mansour Abdullah Al-Shathri, vice chairman of the Riyadh Chamber of Commerce, inaugurated the trade event, which will run from Feb. 24-26.

It was revealed that Saudi auto deals grew approximately 40 percent last year, with female buyers accounting for between 10-15 percent of sales after the landmark decision to allow women to drive in the Kingdom for the first time.  

“International suppliers are stepping up their marketing for the resurgence in Saudi’s market, and this impacts the entire supply chain,” said Mahmut Gazi Bilikozen, show director for Automechanika Riyadh.

“While there is growth potential in the market, it is becoming a more competitive landscape and one which will also have to contend with evolving customer preferences. The conditions are ripe for new business relationships for those wishing to succeed in this transformative environment,” he added.

Zahoor Siddique, vice president of ACE, said: “Future vehicles will become more complex and challenging for the aftermarket industry. It is therefore imperative for manufacturers, local garages, technicians and mechanics to upskill and remain above the curve. 

 “Automechanika Riyadh is one such platform that can enable us to share and learn what the industry needs to unleash its potential.”

Two major US players — disc pad producer Giant Manufacturing and United Motors Mopar, the Kingdom’s sole distributor of Chrysler, Dodge, Jeep and Fiat cars — forecast a bullish market over the next few years.

Giant’s vice president, Eli Youssian, said he believed car sales in the Kingdom would grow by 9 percent annually until 2025, while United Motors District CEO Hassan Elshamarani expected another three million female drivers to be on the Kingdom’s roads by the end of the year.

Both Giant and United Motors launched new products at the show, with the former rolling out its new German-engineered Euro Premium Metallic Disc brake pads, and the latter introducing its Magneti Marelli spare parts.

The high potential of the new-look Saudi automotive landscape has also struck a major chord with South Korean suppliers.

The show’s Korean pavilion is hosting new-to-market entrants and existing suppliers all looking for business partners. With products from wiper blades to filters and air-conditioning parts to brake pads, the Korean contingent was positive about the Kingdom’s prospects.

One exhibitor, D Only Automotive, is looking to ring fence 10 percent of the Saudi brake market. “With more vehicles on the road, demand for brakes will increase, (so) we believe this is possible,” said President Jeon JaeWon.

Global research and analytics firm Aranca — Automechanika’s knowledge partner — has forecast that Saudi Arabia’s automotive spare parts and service market will grow at approximately 6 percent over the next five years to reach a value of $10.15 billion by 2023.

“The spare parts and service market for passenger cars alone is expected to eclipse $6.9 billion by 2023,” said Vishal Sanghavi, Aranca’s automotive practice head.