Spanish Government Budgets IDR 192 Trillion To Build Chip Industry In Matador

JAKARTA - The Spanish government has approved a plan to spend 12.25 billion euros (IDR 192 trillion) on the semiconductor and microchip industries by 2027. This was announced by the Spanish Economy Minister, Nadia Calvino on Tuesday, May 24. This budget includes funds of 9.3 billion euros to build a chip factory in the matador's country.

The program, which consists largely of the EU's pandemic relief fund, is geared towards the digital economy and the demand for chips cannot be met. Initially the budget was set at 11 billion euros when it was announced by Prime Minister Pedro Sanchez last month.

"The aim is to comprehensively develop the design and production capacity of Spain's microelectronics and semi-conductor industry, covering the entire value chain from design to chip manufacturing," Economy Minister Calvino said at a press conference after the weekly cabinet meeting.

An unexpected surge in demand amid the pandemic and supply chain problems have created a worldwide shortage of microchips. It also forced a variety of global manufacturers to slow production last year, including in Spain where automakers Volkswagen and Renault are part of the workforce on assembly lines out of work.

According to the Spanish government, the plan will finance domestic semiconductor production capacity in leading (below 5 nanometer) and intermediate (over 5 nanometer) semiconductor manufacturing with an investment of 9.3 billion euros, the government said.

It will fund research and development with subsidies of 1.1 billion euros and 1.3 billion euros will be allocated for chip design. This budget will also support Spanish companies in strategic projects developed at the European level and will create a 200 million Chip Fund to finance start-ups and upgrades in the Spanish semiconductor sector.

“Lack of support, commitment, vision or even a coherent strategy are some of the reasons the chip industry is absent in Spain so far,” Calvino added, as quoted by Reuters.

"We want Spain to play a relevant role in this technological area, a role it deserves, and European funds offer tremendous opportunities," he said.