Can the UK become a semiconductor powerhouse? Vishay Intertechnology thinks so

Vishay Intertechnology has announced a £250 million investment into its Newport, Wales semiconductor plant, marking a pivotal moment for the UK’s semiconductor manufacturing sector. This significant expansion is set to enhance the production of silicon carbide semiconductors, a vital component in electric vehicles (EVs), renewable energy systems, and industrial applications. The investment, supported by the UK government’s Plan for Change, is expected to create over 500 high-skilled jobs and further strengthen the UK’s position in the global semiconductor industry.

The funding arrives at a time when semiconductor demand is surging due to technological advancements and geopolitical pressures on supply chains. With the automotive and clean energy industries increasingly dependent on advanced semiconductors, Vishay’s decision to scale up production in the UK aligns with global industry trends and the nation’s ambition to become a leader in high-tech manufacturing.

Why Are Silicon Carbide Semiconductors Critical for Electric Vehicles?

The Newport facility will focus on the manufacturing of silicon carbide (SiC) semiconductors, which are superior to traditional silicon-based chips in high-performance applications. These next-generation semiconductors allow for faster battery charging, improved energy efficiency, and longer driving ranges in electric vehicles.

Unlike standard silicon chips, silicon carbide semiconductors can operate at higher voltages and temperatures, making them essential for EV powertrains and advanced power electronics. Major automakers, including Tesla, Toyota, and Volkswagen, are accelerating the integration of silicon carbide components into their EV models to enhance battery performance and reduce energy loss.

With global EV adoption increasing, Vishay’s investment ensures that the UK has a secure, domestic supply of high-performance semiconductors, reducing reliance on Asia-based chip manufacturers. By expanding silicon carbide production in Newport, the company positions itself as a key supplier to Europe’s automotive industry, which is undergoing a rapid shift toward electrification.

How Does Vishay’s Investment Align with the UK Government’s Industrial Strategy?

Vishay Intertechnology’s investment is strongly aligned with the UK government’s Plan for Change, a national initiative designed to boost industrial productivity, create skilled jobs, and enhance domestic manufacturing capabilities. The expansion of the Newport facility is supported by the Automotive Transformation Fund (ATF), a government-led program aimed at developing the UK’s EV supply chain.

By securing a domestic source of semiconductors, the UK reduces its exposure to global supply chain disruptions, such as the 2021 semiconductor shortage that severely impacted the automotive sector. The Compound Semiconductor Cluster in South Wales, where Vishay’s Newport plant is located, is a key part of the government’s strategy to establish the UK as a world leader in semiconductor innovation.

Chancellor of the Exchequer Rachel Reeves emphasized that the investment reflects confidence in the UK’s industrial future. She noted that by fostering high-tech manufacturing growth, the UK can strengthen its economic resilience and create high-value employment opportunities.

Business and Trade Secretary Jonathan Reynolds added that securing a local semiconductor supply chain is crucial for the UK’s automotive, clean energy, and defense industries, which rely on cutting-edge microelectronics. He highlighted that this investment is a step forward in Britain’s long-term strategy to compete in the global semiconductor race.

How Does This Investment Strengthen the UK’s Position in the Global Semiconductor Market?

The semiconductor industry is highly competitive, with manufacturing hubs in Taiwan, South Korea, the US, and China dominating production. The UK, historically lacking large-scale chip fabrication facilities, has relied on imports to meet domestic demand. Vishay’s expansion is a crucial step in reducing this dependency by enhancing local semiconductor manufacturing capabilities.

Silicon carbide technology is also a critical asset in renewable energy applications, high-speed rail systems, and aerospace innovations. By investing in advanced semiconductor manufacturing, the UK not only supports its domestic industries but also strengthens its position in the global semiconductor supply chain, where demand for high-performance chips is growing exponentially.

The Newport plant is part of the Compound Semiconductor Cluster, a network of leading semiconductor firms, research institutions, and government-backed initiatives focused on developing next-generation chip technologies. This strategic investment ensures that the UK remains competitive in a market projected to exceed $1 trillion by 2030, driven by innovations in AI, 5G, and electric mobility.

What Are Analysts Saying About Vishay Intertechnology’s Stock Performance?

Vishay Intertechnology’s investment in Newport comes amid mixed sentiment from financial analysts. As of March 29, 2025, Vishay Intertechnology (NYSE: VSH) is trading at $16.18, reflecting a 2.59% decline from the previous close. Over the past year, the stock has experienced a 29.28% drop, with a 52-week range between $14.95 and $24.68.

Despite recent challenges, analysts predict modest growth potential, with an average 12-month price target of $18.00, representing a 2.39% upside. Zacks Investment Research assigns Vishay an Average Brokerage Recommendation (ABR) of 3.50 on a 1-5 scale, suggesting a Hold rating.

Market analysts cite several key factors influencing Vishay’s stock outlook. Global semiconductor demand remains strong, with industries such as automotive, renewable energy, and AI-driven technology driving increased usage of advanced semiconductors. Vishay’s strategic UK expansion enhances its European market presence, positioning the company to capitalize on regional semiconductor demand. However, semiconductor stocks often experience cyclical fluctuations, and geopolitical tensions in the global chip supply chain could impact long-term performance.

Given Vishay’s strong market positioning but recent stock decline, many analysts recommend holding existing shares while monitoring the company’s financial health and expansion progress. Investors considering new positions may benefit from waiting for improved earnings visibility before making a decision.

How Will Vishay’s Investment Shape the Future of Semiconductor Manufacturing in the UK?

Vishay Intertechnology’s £250 million investment in Newport represents a transformative milestone for the UK semiconductor industry. By scaling up silicon carbide semiconductor production, the initiative secures a domestic supply of high-performance chips, reducing dependence on overseas manufacturers.

The investment aligns with the UK’s long-term vision for advanced manufacturing, strengthening domestic technological capabilities and fostering economic growth in South Wales. As the demand for semiconductors accelerates, Vishay’s expanded production facility positions the UK as a key player in the global chip market.

With government support, expert endorsements, and alignment with the UK’s industrial strategy, Vishay’s Newport expansion signals a major step forward in Britain’s technological and economic ambitions. As electric vehicles, AI, and clean energy sectors continue to evolve, this investment ensures that the UK remains competitive in a rapidly advancing global economy.