The Semiconductor Industry in Newport West

1. Questions to the First Minister – in the Senedd at on 12 September 2023.

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Photo of Jayne Bryant Jayne Bryant Labour

(Translated)

4. What action is the Welsh Government taking to support the semiconductor industry in Newport West? OQ59897

Photo of Mark Drakeford Mark Drakeford Labour 2:02, 12 September 2023

Llywydd, the Welsh Government remains ambitious for the semiconductor sector in the south-east of Wales. Just last week, the Welsh Government signed a declaration to join the European semiconductor regional alliance. That alliance, between European regional Governments, will promote growth, foster collaboration and develop strong value chains in the semiconductor industry. 

Photo of Jayne Bryant Jayne Bryant Labour

Diolch, Prif Weinidog, and I'm glad to see that the Welsh Government are sincere in their support for this crucial industry and the substantial and talented workforce that it supports. I'm really pleased to see last week that the Welsh Government has now joined that European semiconductor regional alliance to support the sector's growth. Sadly, I can't say the same about the Conservative Government in Westminster. Last week we heard the devastating blow that over 100 jobs could be lost in my constituency at Nexperia. Combined with announcements, it will amount to a 25 per cent reduction in the Newport workforce. These losses are as a result of the direct actions and subsequent inactions of the Conservative Ministers in London. Since the order for sale in November, I've been in constant conversations with these committed workers. Between them they have hundreds of years of working in the sector, but they have yet to be treated well. Westminster has refused to engage with them; Westminster Ministers have publicly undermined the cluster and Westminster's lack of impetus over this sale has made job losses inevitable. First Minister, this is disgraceful. My constituents have been left out to dry. Please can the Welsh Government do all it can to support these skilled workers, and crucially can we also put as much pressure as possible on the completion of sale, because with every passing month, the position becomes more untenable? The workforce and the cluster deserve so much better.

Photo of Mark Drakeford Mark Drakeford Labour 2:04, 12 September 2023

Well, Llywydd, this is a sad story and a bad story. It's a sad story for those people who now face themselves being put out of work, and it is a sad story, because it need not have happened in this way. So, here is the history briefly: Newport Wafer Fab acquisition was announced on 5 July 2021. It led to new investment in the plant, it led to new jobs being created in this very important industry in that part of Wales. It took the best part of 18 months before the UK Government decided to block the takeover, a period in which there were a set of equivocal statements by the Prime Minister about the intentions of the UK Government. Having issued a divestment instruction, the UK Government has simply walked away. Now, let us assume for a moment that they had good reason for that decision; what they cannot possibly have thought of as reasonable is to put all those jobs at risk and then to act as though their decision had had nothing to do with what has happened since. And that is how they have acted. They have simply left the mess behind and that is now being felt in those 100 jobs that will be lost at the site.

There are some urgent things that need to happen, Llywydd. The judicial review has not even been listed for a hearing. That needs to be resolved, and then the sale of the company to a new investor needs to be expedited, with the help of the UK Government, so that that factory can go on fulfilling its part in the emergence of that very important cluster in south-east Wales. Fortunately, Llywydd, there are other opportunities. The Member will know that KLA have significant expansion plans, helped by the discussions they've had previously with the Minister for Economy, and there are more discussions with other potential partners in the pipeline. We will do whatever we can both to help the workers and to help the recovery of the premises, but we can't do it when the people who caused the problem have acted as though they had no responsibility for it at all.

Photo of Natasha Asghar Natasha Asghar Conservative 2:06, 12 September 2023

I'd like to thank Jayne Bryant for asking this very important question today. News of the restructuring plan at Nexperia, which could result in the loss of 100 jobs, is extremely worrying for, I'm sure, colleagues all across the Chamber here today, and it's vital that the Welsh Government supports those affected workers, going forward. And I have, First Minister, also been reassured only recently that the UK Government remains committed to a site owner being found very soon.

Now, my region of South Wales East has, in recent years, become a hub for the semiconductor industry, with a vast array of businesses setting up in the area. The Member referred to the UK Government, and the UK Government recently launched its semiconductor strategy, which sets out—in fact, they're going to be investing £1 billion; it's going to be receiving £1 billion of Government investment to help boost the industry, going forward. This move will undoubtedly grow our economy and see the UK remain a global force when it comes to science and technology, which I'm sure is really welcome news. So, First Minister, will you join me in welcoming this fantastic UK Government investment, which will help grow our world-leading semiconductor industry, and will you also commit to working closely with the UK Government to unleash the industry's full potential right here in Wales?

Photo of Mark Drakeford Mark Drakeford Labour 2:07, 12 September 2023

Well, I'm sure the Member will understand that it is difficult to give full-throated support to a strategy when the practical impact on the ground is being seen not in the growth of the industry but in the loss of highly skilled jobs. I hope what she says turns out to be true, Llywydd, that the UK Government is committed to the sale, that it is committed to the future of that site, but we're going to have to see more than words, aren't we, and we haven't seen many of those, even, so far in the Newport case? What we now need to see are actions that will make a difference in the lives of those people who have been directly affected.

Photo of Peredur Owen Griffiths Peredur Owen Griffiths Plaid Cymru 2:08, 12 September 2023

I agree with the comments made by Jayne, and thank you for your answers as well, First Minister. The way that Westminster has behaved towards Newport Wafer Fab demonstrates the importance of Wales having control over its economic levers. Until we have the powers, decisions will continue to be made that run counter to the interests of our economy and our communities. Workers at the plant have told my office that they accept that it is likely that nothing will stop the 100 redundancies and nothing will change Westminster's mind over Nexperia's ownership.

The focus now must be on supporting those being made redundant to ensure that they are given the training and support they need to find alternative employment. And the focus must also be on safeguarding the remaining 461 good-quality jobs and the many more that rely on this facility through the extended supply chain. The last 12 months have shown that the UK Government cares little about the facility and its workers. So, what practical support can you offer to achieve the two stated objectives?

Photo of Mark Drakeford Mark Drakeford Labour 2:10, 12 September 2023

Well, Llywydd, I agree with the Member that the Welsh Government's most urgent, immediate actions must be to help those staff members who've been affected by the decision, and that is exactly what we are doing. We are in contact, through our officials, with the owners of the company. We, of course, are in contact with the trade unions who represent workers at the site. I don't want to strike a note of false optimism, of course, but as I said in my answer to Jayne Bryant, there are other companies investing in this area in Newport who are looking for skilled workers, and the workers who are losing their jobs certainly are that. And the longer term prospects for the semiconductor cluster are strong. There were officials of the Welsh Government in Taiwan only last week, following up leads that came as a result of the economy Minister's visit to California earlier in the year. Newport is a very, very good place for companies to come and invest, and in this industry in particular. And while we will work with the individuals directly affected immediately, the longer term prospects for employment in the sector, if we can get it right—and we need the support of the UK Government for that to happen—I think can be very promising.