Spain to focus on producing simpler chips after losing bids, report says

Spain will focus on making less advanced semiconductors used in domestic industry after its ambitions to manufacture cutting-edge microchips have so far failed to attract investment, according to people familiar with the government’s plans. It’s a schedule.

After losing bids for production facilities to Germany and the United States this year, Prime Minister Pedro Sánchez is focusing Spain’s €12.3 billion ($12.9 billion) plan on mid-range semiconductors.

“Spain has not changed its position. From the beginning, the number one priority of our strategy has been to attract companies that can design or manufacture microchips and part of the value chain,” said a Sánchez spokesperson. the statement said.

Spain, for now, has scaled back its aspirations to produce the most technologically sophisticated chips, with global demand for 10-nanometer to 28-nanometer chips capable of supplying its own automotive industry, the second largest in the EU. We are adapting our plans to take advantage of growing demand. people said.

Block aims to take global market share of microchips to 20% between 2020 and 2030, after pandemic-related supply disruptions and heightened geopolitical tensions fueled calls for more local production The country aims to become the EU’s top producer as it aims to double.

When Spain first unveiled its strategic plan and received funding from the EU Recovery Fund, more than half of its budget was allocated to subsidize sub-5nm chips. Developing these cutting-edge semiconductors requires facilities costing tens of billions of dollars.

Even before the plans were officially announced, Spanish officials were considering a change in strategy, one that would see US tech giant Intel pick Germany in March to build a €17 billion European complex. I chose to do that.

Then, after the Biden administration announced $50 billion in subsidies to chip producers, the big US manufacturers pulled out of pre-negotiations on an investment deal in Spain, they said.

Focusing on a range of less advanced chips will increase the chances of attracting manufacturers to Spain, which can meet much of the global demand and does not have a well-established tech ecosystem of suppliers and talent, he said. officials said. Spain’s original plan included his €2.1 billion allocated for semiconductors with a thickness greater than 5nm.

A statement from the press office said: “Based on innovation, we will subsidize the production of chips in Spain, in line with the EU chip law, which could result in thinner or more mature chips”.

“We have a clear strategy, but we adapt as the market evolves.”

This is in line with a change in European policy after the European Commission earlier this year proposed a chip law that would allow subsidies for the production of “first time” semiconductors.

Countries with large auto industries, including France, have made too much progress in car production, arguing that if the EU wants to reach its 20% target, it cannot focus solely on cutting-edge chips. They pushed subsidies for chips that didn’t.

EU countries passed their own tipping laws last week, slightly expanding the scope of subsidies.

Spain claimed its first success in attracting semiconductor business when it reached an agreement with Cisco Systems in November to set up a chip design center in Barcelona.The size of the investment was not disclosed.

Samsung Electronics is a prime target for Spanish authorities as it could decide on major investment plans in Europe next year, according to people familiar with the matter.
South Korean company executives toured the continent over the summer to see potential destinations, they said.

In November, Mr. Sánchez visited Samsung’s chip-making facility in Pyeongtaek to talk with executives about investing in Spain.

But Spain faces tough competition for investments in even less sophisticated plants. The day before Sanchez landed in Seoul, Dutch Mark Rutte met with South Korean President Yoon Seok-yeol to discuss cooperation in the chip industry.