Newport's semiconductor industry is experiencing rapid expansion driven by artificial intelligence infrastructure demand, with employment in the south Wales compound semiconductor sector climbing 14% in a single year to support 3,140 jobs across the region in 2025, up from 2,748 in 2024. The growth contradicts widespread concerns about AI eliminating positions, instead demonstrating how the technology is generating new roles and transforming existing ones across Wales.
I think there's a huge fear of AI taking away jobs. It's quite the opposite here,said Jutta Meier, chief executive of IQE, one of Wales' most successful semiconductor manufacturers.
We are growing great jobs based on AI and supporting AI, quite the opposite from destroying jobs by AI.
Inside a sprawling metal facility adjacent to the M4 motorway, scientists and engineers at IQE don laboratory-style protective clothing while manufacturing the microchips that power the artificial intelligence revolution. The company has operated continuously in Newport since 1988 and now forms the anchor of a thriving regional cluster.
IQE's recent financial performance underscores the sector's momentum. According to the company's interim results released on 7 September 2026, first-half revenue climbed 43% to £64.6 million, with management maintaining its full-year forecast for revenue expansion exceeding 30%. The firm also secured a $14 million multi-year production order in July 2026 for wafers manufactured at its Newport facility, specifically for artificial intelligence and data-centre applications.
The chips produced at IQE form part of the physical infrastructure underlying data centres rather than connecting to the algorithms enabling human interaction with chatbots. Instead, they are embedded in the computer hardware that sustains operations.
The last 18 months were quite bumpy,Meier acknowledged, as IQE struggled to maintain investor confidence. Earlier in 2026, recognition of the company's role in data centre computing power reversed this trajectory, driving rapid share price appreciation that enabled the firm to eliminate debts and accelerate recruitment.
How does this compare to job losses elsewhere in tech?
The contrast with major technology corporations is stark. Oracle eliminated 21,000 positions globally as it restructured around artificial intelligence, while Amazon and Meta have each cut thousands of roles in recent months despite substantial investments in the technology. Meier attributed IQE's ability to expand hiring to workforce loyalty.
We're really lucky to have a very dedicated workforce that stuck with us throughout this bumpy road. Talent, for IQE, is one of the biggest assets that we have.
An independent study commissioned by CSconnected and conducted by Cardiff University's Welsh Economy Research Unit found that of the 3,140 jobs supported by the south Wales compound semiconductor sector in 2025, 1,914 represented direct employment concentrated around Newport and the broader M4 corridor. Average salaries in the sector reached approximately £66,000, substantially exceeding the UK median monthly pay of £2,657 recorded by the Office for National Statistics in August 2026, equivalent to £31,884 annually.
According to the UK government's 2026 semiconductor sector study, Wales accounts for 8.6% of dedicated semiconductor employees nationally and hosts a 200-millimetre silicon and compound-semiconductor wafer fabrication facility operated by Vishay Newport at Duffryn. The same analysis noted that semiconductor activity across the UK supports a total of 32,550 jobs when supply-chain and wider-economic effects are included.
What opportunities are emerging for young people?
Bassaleg School in Newport, located two miles from IQE, now offers a semiconductor qualification to students pursuing careers in the industry. Head teacher Victoria Lamb emphasised the value of connecting education to local economic opportunity.
It allowed students to learn about an industry that was right on their doorstep,she explained, adding that
it was important that we work with our community to offer pupils these kinds of opportunities.
Grace, a 15-year-old student, described the course as engaging.
We are doing practical work, and before the course I used to think semiconductors were all on a computer.She found it
pretty coolto have the semiconductor industry operating in her city.
Her classmate Evan, who pursues soldering as a hobby, welcomed the opportunity to apply practical skills within an educational setting.
I think semiconductors will play a big role in what I want to do. I want to go into the electro-mechanical side, making robots. And semiconductors play a massive role in making that possible.Evan noted the abundance of employment pathways available after secondary education.
There are so many different companies, especially around Newport offering careers after leaving school.
Semiconductor companies operating in the cluster provide direct support to students pursuing the qualification, creating a pipeline of talent for future expansion.
What is the government's strategy for AI-driven reindustrialisation?
Kanishka Narayan, the UK government's AI minister, positioned Wales' semiconductor growth within a broader reindustrialisation agenda.
The biggest economic opportunity for us is how we create more manufacturing jobs here in Wales, re-industrialise ourselves, hark back to our heritage but for a more durable future and AI is going to be a big part of it,he told a national broadcaster. Narayan highlighted that the semiconductor cluster was
paying 40 to 50% higher wages than many other sectors in the area.
However, Narayan cautioned that the expansion would entail trade-offs.
I think in all industrial change of the past, there have been some jobs created, some jobs lost. The task for us as a society is to make sure that we're supporting everyone who is affected and creating opportunities for our kids, for their kids as well.
This acknowledgment reflects broader concerns about technological disruption. Residents in Lanarkshire have expressed apprehension about a major artificial intelligence datacentre project, fearing loss of land and unfulfilled job commitments, demonstrating that enthusiasm for AI infrastructure must be balanced against community concerns.
How is AI transforming work rather than eliminating it?
Beyond semiconductor manufacturing, Welsh businesses are already demonstrating how artificial intelligence augments human capability rather than replacing it. At TiqToq, a software engineering firm assisting companies in identifying security vulnerabilities, the technology was initially perceived as a cost-reduction mechanism.
But that's not been the story at all,said director Mike Beck.
Artificial intelligence has rendered the work of human engineers substantially more efficient. The company's deployment of artificial intelligence to stress-test client software has generated
over 53% time saving for employees.This productivity gain has enabled the firm to expand its workforce rather than contract it, with artificial intelligence functioning as a critical tool for completing client assignments.
What we've found is that the projects that our customers were looking to release next year, they'll now bring them forward to this year,Beck explained, noting that engineers now concentrate on
the areas that require that extra human insight.
In healthcare and social services, artificial intelligence is reducing administrative burden on frontline staff. Social workers in Vale of Glamorgan are piloting Beam Notes transcription software that records and summarises interactions with clients, substantially reducing the time required to complete associated paperwork.
Social worker Siân Palmer described the impact:
You know it's going to capture all the information you need, without worrying about writing everything down.Palmer emphasised that the technology was
absolutely not replacing peopleand was instead
enhancing interactions with clients.For Palmer personally, the tool addressed a longstanding challenge.
It's obviously a time saver, and for me I've got dyslexia, so for me it's always been a bit of an added stress, I suppose, in making sure my assessments are up to the level they need to be.She characterised the artificial intelligence transcription tool as
just a way of sort of gathering the information in great detail, in a fast way.
What are the next steps for growth?
IQE is actively recruiting to support its expansion trajectory. The company posted multiple vacancies at its Newport facility on 21 September 2026, including positions for Materials & Stores Coordinator, People & Culture Coordinator, Customer Service Representative and Talent Acquisition Business Partner, with application deadlines spanning late September through October 2026.
CSconnected, the cluster development programme, marked five years of operation in September 2026 and announced an ambitious new target: growing cluster revenue to £1 billion and delivering 6,000 jobs in the region by 2030. This objective represents a substantial acceleration from the current employment base and signals confidence in sustained artificial intelligence-driven demand for semiconductor manufacturing capacity in Wales.
