TL;DR

Employment tied to south Wales’ compound semiconductor sector reached 3,140 in 2025, a 14% rise on 2024’s 2,748, says an independent report for the CSconnected cluster from economists at Cardiff University. IQE, based in Newport, makes chips used in AI data-centre hardware, and its boss says AI is adding jobs there. AI minister Kanishka Narayan wants Wales to “reindustrialise” around it.

Chips, not chatbots

IQE, in production at Newport since 1988, makes components that sit in the physical infrastructure of data centres rather than in the software people talk to. Its chief, Jutta Meier, said the firm is “growing great jobs based on AI”, in contrast to fears of automation. After what she called a “bumpy” 18 months, investor recognition of IQE’s data-centre role pushed its shares up earlier this year, letting it pay down debt and resume hiring. Resultsense reported this month on IQE’s return to profit on AI demand.

Of the cluster’s jobs, 1,914 are directly in the industry, mostly around Newport and the M4 corridor. Average pay is about £66,000, roughly double the UK median annual pay of £31,884 that ONS data put at August. Narayan said the cluster pays “40 to 50% higher wages” than many local sectors.

The pipeline is starting young. Two miles from IQE, Bassaleg School is among the first UK schools offering pupils a semiconductor qualification.

AI inside other Welsh jobs

The report on chips sits alongside examples of AI changing work elsewhere in Wales. TiqToq, a Welsh security-testing firm, says AI gave its engineers “over 53% time saving” and let it hire more people as clients pulled projects forward. Social workers in the Vale of Glamorgan are trialling Beam Notes, a transcription tool that drafts records of client meetings; one, who has dyslexia, said it eases the paperwork burden.

Looking forward

The Welsh story is a counterweight to headline job cuts, such as Oracle’s 21,000 global roles. But it is a hardware story: the jobs follow data-centre spending, which has already swung IQE’s fortunes once. Narayan conceded change creates losers as well as winners, saying society must support “everyone who is affected”. For UK policy, the test is whether skills routes like Bassaleg’s can scale fast enough to keep the cluster’s growth local.