Chief Secretary to the Treasury Emma Reynolds has hailed South Wales' semiconductor sector as proof that Labour's reindustrialisation agenda is already delivering, saying Newport is helping build the industries that will power Britain's future growth.
Reynolds visited the CSconnected semiconductor cluster in Newport with Welsh Secretary Stephen Kinnock, meeting firms including KLA, the Compound Semiconductor Applications Catapult and other businesses operating across the cluster.
She said:
"Last week in Newport I saw first-hand how Britain's reindustrialisation is already taking shape."
Reynolds said South Wales was helping to develop semiconductors used in artificial intelligence, advanced manufacturing, clean energy and defence, arguing that these technologies will be increasingly important to Britain's economic and national security.
South Wales recognised as strategic semiconductor hub
The Government's latest Semiconductor Sector Study describes South Wales as one of the UK's most developed semiconductor clusters and the world's first compound semiconductor cluster.
More than £850 million has been invested over the past decade in research, manufacturing and innovation facilities across the region, with a supply chain stretching from Chepstow to Swansea.
The cluster includes major companies such as KLA, Vishay Newport, IQE and Microchip, alongside universities, research institutions and the Compound Semiconductor Applications Catapult.
Reynolds: growth must reach 'every postcode'
Reynolds said the Government wanted to reverse a model in which economic opportunity had become concentrated in too few parts of Britain.
She said:
"Our mission is to rebuild Britain's productive strength by backing the industries where we can lead the world and ensuring growth is felt in every postcode."
Her intervention reflects Labour's wider argument that reindustrialisation does not mean recreating the industries of the past, but investing in modern manufacturing, technology and strategically important supply chains.
Reynolds added:
"That's what reindustrialisation means today. Not a return to the past, but building the industries of the future."
Semiconductors increasingly central to AI and national security
Semiconductors underpin almost every modern technology, from mobile phones and cars to AI data centres, defence systems and renewable-energy infrastructure.
The Government's new £1.1 billion AI Hardware Plan includes investment in semiconductor companies, computing infrastructure and skills, including £80 million specifically for semiconductor and AI hardware skills.
A further £750 million is being invested in a new national AI supercomputer, with hundreds of millions earmarked for next-generation AI chips.
Ministers say developing greater domestic capability in these technologies will support growth while reducing Britain's vulnerability to global supply-chain disruption.
Newport attracting major international investment
The Newport cluster has already secured significant private-sector investment.
KLA has been developing a $100 million European headquarters and advanced manufacturing facility at Imperial Park, while Vishay has announced major investment in semiconductor production in Newport.
The CSconnected programme itself recently marked the completion of a five-year UKRI-backed initiative that supported research, manufacturing and skills across the South Wales cluster.
Partnership between government and business
Reynolds said the success of places such as Newport showed what could be achieved when government worked closely with businesses and research institutions.
"Britain has the talent, innovation and industrial foundations to succeed."
She said the Government would continue backing semiconductors, AI infrastructure and local innovation to attract investment and create skilled employment.
For Reynolds, the South Wales semiconductor cluster shows what modern reindustrialisation can look like: advanced manufacturing, globally important technology, skilled jobs and investment rooted outside the traditional centres of economic growth.
