The Government raises the PERTE of semiconductors to more than 12,000 million | Economy

The Government has taken this Tuesday a step towards the old aspiration of reindustrializing Spain and thus reducing economic dependence on tourism. The Council of Ministers has approved the new Strategic Project for Economic Recovery and Transformation (PERTE) on microchips and semiconductors, which will finally be endowed with up to 12,250 million euros of public investment until 2027 —thanks to the boost from European funds—, 1,250 million more than originally planned. That makes it the largest of the 11 PERTES contemplated, a sign of the importance that the Government attaches to this agenda, a symbol of Europe’s problems in supplying itself in the face of supply chain problems during the pandemic.

The first vice president, Nadia Calviño, who has chaired the Council of Ministers, has described it as the most ambitious project of the recovery plan “because of its amount, its transformative impact and its contribution to the strategic autonomy of Spain and the European Union ”. The initiative has four axes: strengthening scientific capacity, design capacity, information and communication technology industry capacity, and the most important one, building semiconductor manufacturing plants larger than and smaller than five nanometers. A special commissioner led by the expert in microelectronics and telecommunications Jaime Martorell Suárez will command the project.

The movement aims to turn Spain into the engine of one of the European Commission’s great purposes: to reach 20% of the world’s share of microprocessor manufacturing by 2030 —currently around 10%— thanks to a joint disbursement of 43,000 million euros . Despite the huge amounts involved, the goal is not easy. First, because it is one of the most technologically complex industries, and it does not get up overnight. Just starting a factory can take between two and four years, and involve a significant expense, so they are almost unfeasible without public-private collaboration. Some “barriers to entry” in capital and sophistication to which Calviño has alluded.

The Minister Spokesperson, Isabel Rodríguez;  the Minister of Finance and Civil Service, María Jesús Montero, and the First Vice President and Minister of Economic Affairs and Digital Transformation, Nadia Calviño, after the meeting of the Council of Ministers.
The Minister Spokesperson, Isabel Rodríguez; the Minister of Finance and Civil Service, María Jesús Montero, and the First Vice President and Minister of Economic Affairs and Digital Transformation, Nadia Calviño, after the meeting of the Council of Ministers.Eduardo Parra (Europa Press)

And second, because not only Europe has realized its relevance for strategic autonomy. The United States calculates that its share of production has fallen from 37% to 12% in the last 30 years, and it has set out to recover the lost space: it has a plan for 52,000 million dollars in public investment, and the companies have already committed another 80,000 million until 2025, including 20,000 million for an Intel plant in Ohio, the jewel in the crown. China is in the same race, and some of its major tech companies, such as Baidu and Alibaba, have launched their own chip models.

The competition for those investments threatens to be stiff. While in Madrid the ministers gave the green light to the plan, in the Swiss city of Davos, the Prime Minister, Pedro Sánchez, meets this Tuesday with the highest representatives of four key companies in the sector – the Americans Intel, Micron, Cisco and Qualcomm —, and tonight he attends an event organized by the latter, one of Apple’s suppliers.

He knows in depth all the sides of the coin.


Its intention is to sell Spain as the ideal destination where to establish its production plants, as part of European efforts to break the current dependence on those located above all in Taiwan and South Korea, the two great powers in the sector thanks to the giants TSMC and Samsung. “We want to become the best partner for the industry and its efforts to expand and diversify microchip manufacturing to address growing demand and supply chain disruptions. Spain is not going to lose the race towards the most advanced technologies”, stated Sánchez during his speech at the World Economic Forum.

The stages of the conception of semiconductors are many, since the supply chain is extensive. It includes design, manufacturing, assembly, packaging and testing processes in which borders are crossed again and again until they reach the companies that integrate them into their products and finally put them on sale to the consumer. Calviño has specified that the objective is to cover the entire value chain, from design to production. In 2021, semiconductor sales moved around the world 555,900 million dollars, 26.2% more, according to the Semiconductor Industry Association (SIA). And its forecasts for 2022 predict a growth of 8.8%.

A global supply crisis

The pandemic has altered the paradigm, practically immovable in recent decades, that globalization and its supply chains were enough to provide resources to the entire planet safely, quickly and cheaply. Terms such as deglobalization and relocation have entered strongly into the vocabulary of politicians and experts, now more aware that giving up technological sovereignty in exchange for a more affordable product can be expensive in the long run.

The lack of semiconductors derived from the closure of factories in Asia due to the pandemic, and above all from the high demand for electronic devices due to teleworking, has caused stoppages in Spanish car factories, shortages of products such as video game consoles or household appliances, and has destroyed jobs and growth. In Europe, the delay in production is counted in hundreds of thousands of vehicles, which has led to long waits by users, or that they opt for second-hand cars, which are also more polluting than new ones. In the US, the same problem has driven up used car prices.

It is true that the automobile, with the emergence of electric and autonomous models, needs more and more semiconductors, but this industry is only one of the many that use them: mobile phones, computers, video games, medical equipment, vacuum cleaners, refrigerators, etc. washing machines, among many others, use these tiny intelligent components to function. “Rare is the utensil of our daily life that does not have a chip inside”, Calviño pointed out. In fact, those used in the automotive industry are among the least sophisticated, because such small sizes are not needed, which has made it easier for some European companies to be able to manufacture them. In other areas, such as mobile phones and computers, however, there is fierce competition that is measured in nanometers: the big companies wage a continuous battle for innovation that wins whoever is able to reduce the size of the chip, whose ceiling is now around three nanometers, although with even smaller measurements on the horizon.

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