Spain Plans $12.4bn Chip Sector Investment

Spain is to make a sizeable investment into the semiconductor sector, after it recently witnessed neighbouring countries land contracts to build chip fabs.

The Spanish government outlined plans to invest as much as 11 billion euros ($12.4bn) so as to boost the country’s chip industry.

The chip investment plan was revealed by Spain’s Prime Minister Pedro Sanchez at a press conference on Monday.

Spanish investment

According to Mobile World Live, Sanchez stated he wants Spain “to be at the vanguard of industrial and technological progress” and the project would be approved by his cabinet “soon”.

Spain will reportedly finance the investment from the European Union Coronavirus pandemic relief funds, which were made available to EU countries to provide aid in the recovery from the impact of Covid-19.

Spain’s decision comes amid a global shortage of computer chips during the Coronavirus pandemic over the past few years.

That shortage was caused by strong demand for chips during the pandemic, but supply chain bottlenecks, coupled with a severe drought in Taiwan (where most processors are made), triggered widespread shortages and big price increases.

The car industry was badly impacted, due to the small amount of inventory car makers typically held.

State aid

To solve the chip crisis, the European Commission in February unveiled a multi-billion euro Chips Act in to bolster the continent’s competitiveness in the sector.

The EC plan had first been announced by Ursula von der Leyen last year, and in March 2021 the European Union under its 2030 Digital Compass plan announced it wanted to produce at least 20 percent of the world’s cutting-edge semiconductors by the end of the decade.

Intel for its part was willing to engage with the Europeans.

In September last year CEO Pat Gelsinger said Intel could potentially invest as much as 80 billion euros ($95bn or £69bn) to expand chip production in Europe, but only if state subsidiaries were available.

Gelsinger also recently explained how semiconductor fabrication plants (fabs) are nowadays strategically important.

Last month Intel confirmed that it would invest 33 billion euros in EU, including 17bn euros for a ‘semiconductor fab mega-site in Magdeburg, Germany’.

In addition, Intel and Italy have entered into negotiations to enable a state-of-the-art back-end manufacturing facility.

This would be in addition to the foundry innovation and growth opportunities Intel expects to pursue in Italy based on its planned acquisition of Tower Semiconductor.

Intel said it will also create a new R&D and design hub in France.

In addition to all this, Intel at the time said it would invest in R&D, manufacturing and foundry services in Ireland, Italy, Poland and Spain.