Compound Semiconductor Commercialization in Wales

July 09, 2015 by Jeff Shepard

IQE plc and Cardiff University have established a joint venture to lead the development and commercialization of Compound Semiconductor technologies in Europe. The establishment of this JV is a key milestone towards the creation of a European CS cluster centered in Wales, which is increasingly seen as a strategic enabler for the UK and European electronics industries. Compound Semiconductors are a Key Enabling Technology (KET) for the economic growth drivers identified in the European Commission's "Horizon 2020" economic growth strategy, aimed at the re industrialization of the EU.

The JV will work closely with Cardiff University's Institute of Compound Semiconductors (ICS), which in itself establishes world class CS research, development and innovation in Wales, with over £29m of funding from the Welsh and UK governments. The ICS forms part of Cardiff University's £300m investment in new research and innovation centers.

The announcement of this JV follows an announcement earlier this year of a £17.3m award intended put Cardiff University at the cutting edge of semiconductor technology has been announced by UK Government. Funding unveiled by Universities Minister Greg Clark MP will underpin the Compound Semiconductor Research Foundation, the first of its kind in the UK, with potential to become one of the leading clusters in Europe. The Foundation, earmarked for the University's Innovation Campus, will drive the testing and development of ground-breaking technology that lies behind global 'megatrends' including smart phones and tablets, powering change across sectors including healthcare, biotechnology and mass communications.

The award adds to £12m already pledged by Welsh Government to support the Foundation. The funding will strengthen bonds between Cardiff headquartered IQE Plc, a leading global compound semiconductor wafer supplier, and the University.

Collectively, the ICS, the JV, and IQE’s existing world class CS operation in Cardiff establishes the core elements of a CS ecosystem in Wales to bridge early stage research, product development, prototyping, and pilot production, through to high volume manufacturing. This clustering also enables the Region to continue to attract, develop and retain world class talent in the CS field, including CS research posts, industry placements, and CS graduate employment. Notably, Cardiff University recently announced the appointment of Professor Huffaker, a leading CS researcher from UCLA. By working closely with the Alacrity Foundation, a unique entrepreneurs training camp, the National Software University, Cardiff University and other UK and European Semiconductor companies, a complete range of KETs skills development will be facilitated by the CS Cluster.

The JV will be jointly owned and jointly controlled by Cardiff University and IQE plc. To establish the JV, IQE will contribute equipment with a market value of £12m, which will be matched by a £12m cash contribution from Cardiff University. IQE will also license certain intellectual property (IP) to the JV. The JV will be established effective from 1 August 2015, which will create a non-cash exceptional gain of approximately £4.7m in IQE’s accounts due to the difference between the book value and market value of the equipment contributed by IQE. Also, on that date, IQE will receive and recognize revenue of £2m relating to the IP license.

Both partners see very significant benefits accruing from the JV. Cardiff University will now have a very clear and effective route to commercialize the World Class R&D to be carried out at the ICS, and will be able to attract significant Corporate and other R&D funding, whilst IQE will be able to take the technologies developed at ICS and the JV directly into large scale mass production.

Dr Drew Nelson, Chief Executive of IQE, said: “This JV with Cardiff University is a key step in creating the World’s first Compound Semiconductor Cluster, spanning the complete Technology Readiness Level (TRL) scale from basic research to full scale production. Our goal is to build this Cluster into one of Global significance and scale, leading to widespread economic benefits for the region, and providing a broad range of CS Technologies to support the rapid growth of the Key Enabling Technologies agendas, in Europe and throughout the rest of the World. IQE look forward to working closely with ICS and the JV to commercialize these exciting new technologies.

“The University’s mission is to be consistently among the top 100 universities in the world and the top 20 in the UK. Fundamental research is essential for sustaining academic growth, and for improving the health, wealth and well-being of society. Coupling IQE’s infrastructure with Cardiff’s existing strengths in expanding areas of semiconductor devices and materials will create cutting-edge opportunities that will put us ahead of our competitors,” added Cardiff University Vice-Chancellor, Professor Colin Riordan.

“This new company will help create commercial opportunities from the excellent compound semiconductor research work going on at Cardiff University. Together with the appointment through our Sêr Cymru program of Professor Diana Huffaker, a world renowned expert in the field, Cardiff is now well placed to become a hub for Compound Semiconductor research and exploitation,” concluded Minister for Economy and Science, Edwina Hart.