Spain to manufacture its own microchips: €11bn investment to reboot national industry

SPAIN'S president Pedro Sánchez has announced a €11 billion investment in manufacturing microchips and semi-conductors in a bid to reactivate the motor manufacturing sector.

According to industry sources, the global microchip crisis has delayed the production of over half a million new cars in Spain, a situation affecting various makes and models.

These are also a 'basic element in all energy sectors', Sánchez explained when opening this week's 'Wake Up, Spain' forum organised by daily newspaper El Español.

“Microchips take on a geo-strategic significance at worldwide level as part of the digital and technological revolution,” the nation's leader recalled.

“And Spain is not going to lose the race when it comes to advanced technology.”

Known as a 'Strategic Economic Transformation and Recovery Project' (PERTE), the microchip and semi-conductor manufacturing plan will 'put the country at the cutting edge of industrial and technological progress', Sánchez said on his Twitter site, @sanchezcastejon.

Semi-conductors are tiny elements needed for most modern-day devices, not least mobile phones, and a global shortage is holding up manufacturing and retail of goods which, nowadays, are essential for business, personal communication, transport and energy.

The most recent report from the World Semi-conductor Trade Sector (WSTS) reveals a turnover of nearly US$551 billion in the market for these elements as at the end of 2021, a year-on-year increase of 25%, and predicts similar figures for the close of 2022.

By the end of this year, the world semi-conductor market is expected to have grown by 10.1% annually, rising to almost US$607bn.

The microchip crisis was caused by stocks running low following the pandemic, forcing many manufacturing industries – the motor trade especially – to slow down production as a result.

Pedro Sánchez has already approved nine PERTE projects, largely financed by the European Union pandemic recovery funds already received, which total €19bn.

Around €56bn will be spent on these economic transformation and recovery plans – which include electric cars, food and farming, renewable energy, 'cutting-edge' healthcare, a new 'language-based economy', Naval industry, the water cycle, aerospace industry and the circular economy – of which €19bn will come from public funds and the rest from private corporate sources.

A further recovery and transformation project currently being drafted is linked to the 'social care economy', given that society's care needs for the elderly, sick, disabled, and children is largely carried out by family members who are unpaid for their labours and unable to take part in the job market as a consequence of these duties.

Overall, Spain has approved spending of almost €28bn of public funds, including EU pandemic recovery cash, on nearly 11,500 different projects 'with real benefits for society, the economy and employment', in the past nine months, Sánchez reveals.

Last week, Sánchez and his cabinet agreed an emergency cash injection of €6bn in direct benefits and €10bn in micro-credits to cushion the negative economic impact caused by the conflict in Ukraine, including a 20-cents-per-litre subsidy for petrol and diesel, a 15% rise in the State 'minimum income' payable to hard-pressed residents, and extra funding to finance discounted electricity and gas bills for low-earning households, enabling the system to reach another 600,000 family units.