Funding of £37.9 million is to be provided by the new Cardiff Capital Region (CCR) to develop a compound semiconductor industry cluster in South Wales.
This is the first such investment since the £1.2 billion CCR City Deal was established by the leaders of the 10 local authorities in the region on 1 March.
The project could leverage up to £375 million of private-sector investment over the next five years and support the creation of up to 2,000 jobs.
A facility will be constructed in the region (with Newport the most likely location) to house the development of compound semiconductor applications; it will be owned by the 10 councils.
Andrew Morgan, leader of Rhondda Cynon Taf County Borough Council (and chairman of the CCR City Deal) said: “The objective of these commitments is to create a complete compound semiconductor eco-system in South Wales to take advantage of the growing prominence of this technology.
“This requires the development and integration of a compound semiconductor supply chain in South Wales, with the economic and social benefits that will bring.”