IQE plc (Cardiff, Wales), a leading supplier of engineered wafers, wants UK government support to help it create the “TSMC of compound semiconductors” in South Wales.
Americo Lemos, the CEO of IQE, told eeNews Europe in an interview that such a project would cost about £1 billion but would need a public-private partnership to get started. Americo said that IQE was open to different ownership and funding models but that the opportunity in South Wales was too good to waste.
Americo Lemos, CEO of IQE plc
“We can put a pure-play foundry into our building [in Newport]. We have the space,” said Lemos.
But Lemos also insisted that a decision must be reached quickly. Lemos said: “The market doesn’t wait for us. This is something we would need to get going in the next 12 months. But this is a tremendous opportunity. We can leverage existing infrastructure in a built-for-purpose building. It makes sense do it this way.”
IQE has occupied a large building in Newport since 2017 where it produces epitaxial compound semiconductor wafers of multiple sizes and materials. These can include gallium-arsnide, indium-phosphide, gallium nitride and GaN-on-silicon, GaN-on-silicon-carbide and so on. Such wafers then get processed into devices by IDMs and foundries for use in a wide variety of power, RF and optical applications.
The building currently houses ten metal-organic chemical vapour deposition (MOCVD) systems out of a planned 100 such machines.
However, as part of Lemos’ plans to scale up IQE he has a vision to get the company into making devices for customers rather than just wafers.
In his interview with eeNews Europe Lemos pointed out that the UK is one major country in Europe that has yet to announce significant semiconductor investment. But that while Germany and France are pursuing high-volume silicon technology the UK already has the makings of a near-complete compound semiconductor ecosystem from previous efforts in South Wales. One thing that is missing is a pure-play foundry, said Lemos.
Lemos thinks there should be a spend of about £1 billion pounds over several years. “There is no point in building sub-scale. We want to create the TSMC of the compound semiconductor business.” He added: “The obvious place to do it is South Wales.”
Vision into project
If IQE can bring such a project together it would be stepping up to replace an open-access foundry that had been planned for a near neighbour site, Newport Wafer Fab, as part of support for the South Wales cluster of compound semiconductor companies. That plan was thrown into doubt when Nexperia BV acquired the fab in July 2021 to use for its own power device production (see China’s Nexperia buys Newport Wafer Fab amid concerns).
At the time reports stated that Drew Nelson, Lemos’ predecessor as CEO of IQE (see IQE boss to step down) and outgoing chairman of Newport Wafer Fab, would spin-off the compound semiconductor part of NWF and create a new venture keeping the Newport Wafer Fab name. A company called Newport Wafer Fab 10 Ltd. was registered with Companies House on July 5, 2021, with Drew Nelson as the sole director. The company name was then changed to NWF10 Ltd.
However, speaking earlier this month to a House of Commons committee on semiconductor strategy Toni Versluijs, UK country manager at Nexperia, told UK members of parliament that his company’s offer to support a compound semiconductor foundry within Nexperia Newport has been on the table for a year with no action (see Newport chip foundry is still possible, Nexperia’s Versluijs tells MPs).”What it would require is funding and a viable business case and viable business plan. The option, to be quite honest, is already outstanding for almost a year,” Versluijs said in the meeting.
Government support for such capital expenditure in semiconductors elsewhere has typically run at 30 to 40 percent but the UK government is not known for being supportive of such high capital expenditure flagship projects.
UK government officials have visited the IQE’s Newport site recently to discuss semiconductor strategy but the government is currently undergoing a transition of administration as Prime Minister Boris Johnson is replaced.
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