The Spanish government says that developing the country’s microchip and semiconductor industry will be crucial for transforming the country’s economy and making the national a digital leader

At the ‘Wake up, Spain!’ economic forum event this week, Spanish Prime Minister Pedro Sanchez has outlined plans to invest €11 billion in the country’s burgeoning semiconductor industry.

The expenditure will take place as part of broader government strategy known as Strategic Projects for Economic Recovery and Transformation (PERTE). Announced at the end of 2020 to help map the expenditure of European coronavirus relief funds, the PERTE has since evolved to cover various areas viewed as crucial for modernising Spain’s tourism-heavy economy, including electric vehicle research, renewable energies, agriculture digitalisation, and medicine. 

All told, PETRE will mobilise around €56 million, of which €19 million will be public funds.

“We want Spain to be at the vanguard of industrial and technological progress,” said Sanchez, who noted that chip technology is of “global geostrategic importance”.

“Spain will not lose the race to the most advanced technology,” he added.

The geopolitical importance of chip technology and supply chains have been increasingly thrust into the spotlight in recent years, particularly against the backdrop of an ongoing global semiconductor shortage. In Europe, expanding the continent’s own semiconductor industry has been a major focus in recent years, with the European Commission aiming to ween the country off of its reliance on US technology and Chinese manufacturing capabilities.

"Increasing our autonomy does not mean isolating ourselves in a world where supply chains are global," said European Commissioner Thierry Breton last April. "In parallel to exploring how we can increase Europe’s capacity…we will continue to build bridges with international partners – but with us in the driving seat."

Discussions surrounding expanding this ecosystem are already beginning to bear fruit. In summer last year, following discussions with Breton, Intel announced that they would invest €80 billion into an ‘ecosystem-wide’ chip project in Europe over the next decade; since then, the company has pledged to build a €17 billion chip fab in Germany, as well as investing a further €12 billion into its manufacturing capabilities in Ireland.

Indeed, the necessity of building out Europe’s own capabilities in the semiconductor space was not lost of Prime Minister Sanchez, who said the technology was vital to European technical sovereignty.

“This ambitious project to bring major investments to semiconductors and related technology will be key to reaching strategic autonomy at the European level,” he said. 

The €11 billion earmarked for investment in the semiconductor industry has yet to be approved, with Sanchez saying the process would be completed “soon”.

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