Culture, Communications, Welsh Language, Sport, and International Relations Committee, 21 May 2025 | Open Senedd

Culture, Communications, Welsh Language, Sport, and International Relations Committee, 21 May 2025 | Open Senedd

Chris Meadows

I would echo the thoughts about the global nature of the industry. It's estimated that, from the starting product right the way through to the final device, whether it's an electric vehicle or a mobile phone, the components travel around the world between three and six times, because different parts of the process happen in different locations around the world, and, actually, semiconductors were the first to be outsourced around the world. So, it was the first real outsourced overseas global operation.

My role has really been for the last 40 years, or the best part of 40 years—. Wales has a very strong and a long history in semiconductors, but I guess it's only since about 2015 or 2016 it's really been recognised. I was part of the founding team of a company called IQE, which manufactures wafers, but we have other large-scale manufacturing parts of the process within the south-Wales region. Around about 2015 or 2016, it was actually a Welsh Government sponsored mission, which was called the Regional Entrepreneurship Acceleration Program, which involved a delegation to Massachusetts Institute of Technology. And, actually, MIT, in a report, identified one of the key strengths of Wales as being compound semiconductors.

One thing I would add to the previous comments is that most semiconductors involve either memory—storage of data—or processing of data. Most of that occurs either in North America, or, in particular now, in Taiwan and Korea, but, actually, without other types of semiconductors, called compound semiconductors, which provide the sensors, the power, electronics and other features that are essential to today's electronic equipment, the rest of the semiconductor industry would not work. So, Wales actually plays a very key role in this specialist form of semiconductors, which makes up around about 10 per cent of the total semiconductor market, and it's quite distinct from the silicon-based technology that we all hear about, and it's something that Wales has had a key strength in for the last 40 years. And, actually, the global nature of that, and promoting this around the world, is becoming more important, because the competitive threat of the landscape is changing quite drastically with trade considerations and also with the funding that's going in to reshore the semiconductor industry in places like North America and in Europe. So, we need to make sure we maintain that profile so that it's not lost.

09:20Watch #Official Record

Yr Athro Siraj Shaikh

Yes, please. Thank you. I think the comments about shifting the global supply chains are very important here. The one thing that has shifted considerably in the last couple of years, but particularly the last few months, of course, is, I think, this whole supply chain has to be understood from three perspectives. One is the importance of security and trust in the design of these products and chips, and this is important because we've seen a number of unfortunate examples, and very clear examples, where it has been exploited and weaponised by nation states. So, the importance of that security and trust has to be reinforced, and once again, the capabilities we have in Wales alongside the wider skills and capability around security and trust and resilience is something that has to be joined together. And so that's one.

The second thing, of course, also is that what we're seeing is an economic imperative around the sovereignty around these supply chains. So, no longer is it about having the capability, but it's about having it in the right place. So, the comments about different geographies, and the fact that Wales is aligned in a number of ways—we're close to Europe, we also work very closely with colleagues in North America, parts of Asia, the number of trade missions that were mentioned—exactly. They have reinforced those skills. So, having a geography that is trusted, which is reliable, which is devoid of dramatic political shifts, as you might see across the pond, is very important.

And finally, the other imperative here, which has become very clear, is national security. So, no longer is this about economic competitiveness, but it is also about having that sovereignty over the supply chain. Also, having the technology-related skills and capability directly feeds into national security in terms of the increasingly digital nature of a number of infrastructures, of products, of defence systems, and critical national infrastructure that depends on this. So, if we apply that lens increasingly so going forward, I think it is going to be very important. But equally, it's also an opportunity for Wales.

09:24Watch #Official Record

Chris Meadows

Yes, just to add to that, TSMC, the Taiwan Semiconductor Manufacturing Company Limited, is expanding globally. It needs to open up in America to gain access to or keep access to the American markets, and its new site in Arizona is a five-year project before it comes online at a cost of $40 billion. Now, I'm not suggesting that that's what we will have in Wales, and our sub-sector, if you like, is certainly less expensive than the silicon technologies that are being developed there, but we do need that co-ordination and a lot more joined-up thought. We come together quite frequently with the Welsh Government, as I say, at events like trade shows and in hosting events around trade shows, certainly in California, Taiwan, Japan, and we've had a really good presence there, but I think we need a lot more joined-up thinking.

Also, my suggestion would be to look at the supply chains that semiconductors feed into, because we're very keen to attract start-ups, scale-ups and foreign direct investment into the region, but actually, rather than shipping the semiconductors around the world three or four times, it would be great if we had some of the producers that use semiconductors in the UK, and ideally within Wales. One example that I would quote is that the Semiconductor Industry Association in North America estimates that for every job in the semiconductor industry, it creates 5.7 jobs in the downward supply chain. We saw the effect of that during COVID, where a lack of supply, or a perceived shortage of supply of semiconductors, brought the car industry to its knees and cost the industry, in 2021, $250 billion, just because they couldn't get certain chips.

So, it is a very integrated industry. It has high value, but unfortunately most of what we produce in Wales, around 98 per cent, is actually exported, and most of that goes outside of Europe, and so those 5.7 jobs in the downward supply chain are being created elsewhere. It would be great to be able to capture some of those in Wales and the UK. So, a strategy that brings that together and encourages supply chain companies in healthcare, artificial intelligence, robotics, all of those areas that use semiconductors, and in particular compact semiconductors, is a great opportunity, and I would like to see much more in the strategy about how we can leverage the power that we have in semiconductors.

09:30Watch #Official Record

Yr Athro Siraj Shaikh

Thank you. I couldn't agree more. I think the focus on the early part of the skills and talent pipeline on raising awareness is incredibly important, and I say that as a university professor/lecturer. When we're addressing students and addressing the audience, I think, very often, I am surprised as to how unaware some of the early career—well, mostly, not entirely, but mostly a lot of the early career—young audience are, who are unaware of the fact that a lot of these supply chains are linked up. We cannot just compete on our own. We have to be part of that global value ecosystem and work in harmony, and have consensus around technology standards, for example, and regulation, and so on. And that awareness campaign, whether it's a media campaign or a much deeper campaign, and that effort to co-ordinate and join up those different players, I think, is very important.

I'll just give one example, which is something that we've recently put out in a press release, and going back to Gareth's point earlier about investment. So, we're obviously having to compete nationally and internationally for competitive funding, as such, already. But, in Ebbw Vale, we have Thales's National Digital Exploitation Centre, and Swansea University and us, we recently secured £1 million-worth of funding from UK Research and Innovation to set up a prosperity partnership. And the prosperity partnership is not just led by a key research and development objective, but also by the impact on local skills, growing local talent, and offering local employment opportunities as part of that.

We need more of this. That's just one example. But I think we need more and more joined-up thinking where we in the university could argue that we're working hand in hand with cutting-edge technology and industry to send out that positive message. Because I think we need to restore that confidence and enforce that confidence in a lot of people coming into the higher education system, and the education system overall, that we are not lagging behind and so on.

09:43Watch #Official Record

Yr Athro Siraj Shaikh

So, two things, perhaps, which we maybe haven't touched on—certainly one of them. One thing, I think, at a political level, could be achieved and articulated in some way. I talk about co-ordination, but if we look at some of the other geographies, countries in Europe, of course North America and so on, the role of technology and technologists side by side with the key political figures is a great symbol. So, who would have thought we would have Elon Musk standing beside the President of the United States and openly selling stuff? But this is the reality if you go to geographies, for example, in India or in the Gulf and so on. So, I think, perhaps, that very front, political kind of messaging and showcasing has to shift, first of all.

And secondly—and this, I think, is a very important point—when I'm working with my colleagues in Munich or in other parts of the world, very often the lunch time conversations or the dinner time conversations are about the culture, about the receptive nature of the local population, as to how they are. So, post Brexit, obviously, we've had to work on the whole PR thing, as to how we kind of manage that. Once again, I find a lot of the local population are very well aware, but perhaps not as much as we could be, of the nature and the role of the global supply chains, as we talked about earlier, but also, culturally, are we seen as welcoming enough for colleagues from Japan, Korea, India or other geographies who can then come here, work here? Because, obviously, there's a whole cultural underbelly to this economy, with highly mobile talent, people would come from all over the world, would bring their families, would want to thrive here, and then, of course, the cultural perception—how technology is perceived, are people excited, the earlier conversation about schools and colleges and that kind of messaging, but also, then, the broadcast media, the public campaigns and Visit Wales. So, Visit Wales, but maybe not just for the castles and the beauty and so on, but for the whole technology investment that we've done—I think, once again, the school visits, for example, and so on. We have to pay attention to that. I noticed the word 'culture' in this committee, and I think that culture needs to go hand in hand, because technology brings its own culture. It's incredibly global, it's diverse, it's changing, and it's also political now as well. So, I think, at a political level, we would really welcome that kind of intervention.

10:05Watch #Official Record