Broadcom Scraps $1B Spain Semiconductor Investment After Failed Government Talks

Broadcom has terminated its plan to invest $1 billion in Spain following failed negotiations with the government, as reported on July 14. The investment, originally set to be announced in July 2023, involved building a semiconductor back-end (assembly and testing) facility unique in Europe.

The decision comes amid broader EU efforts to bolster its semiconductor industry. In February 2022, the European Commission proposed the EU Chips Act, which was formally approved in July 2023. The legislation aims to increase the EU’s share of global chip production from 10% to 20% by 2030, backed by €43 billion in public and private funding. Spain had hoped to leverage EU recovery funds to develop its semiconductor infrastructure, initially targeting advanced wafer fabs for cutting-edge smartphones and computers. However, the plan was abandoned due to Spain’s inability to secure a significant foothold in that market segment.

Shifting focus, the Spanish government turned to less advanced chips, which have higher demand and greater potential to attract investment. In July 2023, Spain announced a partnership with Broadcom to build a $1 billion entry-level testing and assembly facility. The project, described as a "large-scale, Europe-unique back-end semiconductor facility," was expected to receive up to €12 billion in subsidies from the EU’s pandemic recovery fund. It was seen as a key step in reducing Spain’s reliance on U.S. and Asian semiconductor suppliers.

However, by January 2024, reports emerged that negotiations over the facility’s location had stalled. The latest update confirms the talks have been suspended for months, ultimately collapsing due to disagreements between Broadcom and the Spanish government. This setback is also linked to political changes in both Spain and the U.S., which may have influenced the negotiations.