The main objective of the Spanish Semiconductor Industry Association is to boost the semiconductor sector in Spain.
Next week, the Spanish Semiconductor Industry Association will request a meeting with the Minister of Industry, Trade and Tourism, Reyes Maroto, to discuss the construction of a chip plant in Spain in conjunction with the major technology companies, which would make it possible to avoid relying on the heavy concentration of factories producing these components in Southeast Asia and avoid supply bottlenecks such as the current one.
As reported to OKDIARIO by the president of this organisation, Danny Moreno, CEO of Wiyo, at this meeting the association, in addition to showing its interest and offering its support for this initiative, will present the government with proposals on subsidies and tax incentives which, in his opinion, the sector needs for this project to go ahead.
Moreno indicated that the association is very interested in opening a negotiation process with the ministry so that “the government knows and is informed of our capabilities in Spain”. Although talks have not yet begun, Moreno assumes that the government’s interest in the project is “very firm”, after it has expressed its “ambition” to be able to have semiconductor factories.
Spain could become a technological hub in the field of semiconductors if these possible negotiations between the Spanish government and companies in this sector were to prosper in order to attract technological giants such as Taiwan’s TSMC – which controls 60% of the world semiconductor market – or South Korea’s Samsung, to deploy their resources.
In return, Moreno stresses that “the country has to compensate” with incentives for the arrival of these firms, which provide their technology and allow foreign dependence on the supply of chips, a strategic industry for the Spanish economy, to be reduced.
“Nowadays, they are a vedette, they are the most desired, they bring technology and invest part of their resources”, argues Moreno.
The semiconductor sector in Spain
Once the talks with the government are concluded, the shortest way to make the construction of a semiconductor factory in Spain a reality will be to try to get the big companies in this global industry to take note of the advantages offered by Spain so that they can bring their know-how to the country.
“We have information about the interest of these Asian companies and the US company Intel in extending the factories to the European community as well”, Moreno assures us.
Spain is “attractive” because it has “very well-established industries, such as the automotive, defence and aeronautics industries”, where chips are key components, but it also has technologically prepared personnel, he adds. There are currently 47 universities and research centres in Spain dedicated exclusively to semiconductors, according to the association’s data.
Another incentive for these companies is the standard of living in Spain, where they find a welfare state that does not exist in other countries. “That counts for a lot,” he says.
In addition, the factor of the inputs provided by this country is also a determining factor. For example, in the chemical and optical processes involved in the manufacture of integrated circuits with millions of components, water is very important, and in Spain it is abundant, says Moreno.
The semiconductor market
The semiconductor market is estimated to grow by 12.5% in 2021, a year marked by a supply-demand imbalance caused by a global shortage of chips in the context of the pandemic, which led to supply bottlenecks for these in-demand components. The industry set a record in the third quarter of 2021, after more semiconductor units were shipped than in any period since records began.
Europe accounted for 12% of the global industry in 2020, which has led the European Union (EU) to call for an increase in semiconductor production to reduce dependence on some East Asian countries. In this sense, Moreno considers that Spain would become a relevant technological pole in Europe if it finally proceeded to build a chip plant. The semiconductor sector would become the third most important industry for the Spanish economy after tourism and the automotive industry, he predicts. That, however, will not be an overnight process, as it will take “between three and five years” from the time the official decision is taken until the factory is operational, he estimates.
Spain emerged this year as the EU country most affected by the impact of the lack of parts supply in the automotive sector. Experts suggest that Spanish car factories have suffered more from the semiconductor crisis than those in Germany or France, as carmakers are sending parts only to plants where the most competitive vehicles are produced in the market and where they are most profitable – mid-range or top-of-the-range.