Spain to Spend EUR 12.25 Billion on Semiconductors, Microchips by 2027

The Spanish government has approved a plan to spend 12.25 billion euros (roughly 1,061,600 crore) on the semiconductor and microchip industries by 2027, Economy Minister Nadia Calvino said on Tuesday, including 9.3 billion euros (about 77,100 crore) to finance the construction of plants.

The program, which consists largely of the European Union’s pandemic tools, targets the digital economy and the demand created by chip shortages. It was originally set at 11 billion euros (approximately 91,200 crore) when Prime Minister Pedro Sanchez announced last month.

“The aim is to comprehensively develop the design and production capacity of the Spanish microelectronics and semiconductor industry, which covers the entire value chain from design to chip manufacturing,” Economy Minister Calvino said at a news conference following the weekly government meeting.

An unexpected increase in demand in the midst of the pandemic and supply chain problems had created a worldwide shortage of microchips and forced a wide range of global manufacturers to slow production last year, including in Spain where carmakers Volkswagen and Renault partially idled on assembly lines.

The plan will fund domestic semiconductor production capacity in conductive (below 5 nm) and mid-range (above 5 nm) semiconductor manufacturing with an investment of EUR 9.3 billion (approximately Rs 77,100 crore), the government said.

It will fund research and development with a grant of € 1.1 billion (approximately € 9,100) and € 1.3 billion (approximately € 10,800) will be allocated to chip design. It will also support Spanish companies in strategic projects developed at European level and will create a € 200 million (approximately € 1,700) chip fund to finance start-ups and upscaling in the Spanish semiconductor sector.

Lack of support, commitment, vision or even a coherent strategy were some of the reasons why the chip industry has no presence in Spain so far, Calvino added.

“We want Spain to play a relevant role in this technical area, the role it deserves, and the European funds offer an extraordinary opportunity,” she said.

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