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Spain to invest $12.4 billion in semiconductors

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Spain to invest $12.4 billion in semiconductors

An ongoing global semiconductor shortage, caused initially by the COVID-19 pandemic and made more pressing by Russia’s invasion of Ukraine, has gripped the world

On Monday, Spanish Prime Minister Pedro Sanchez revealed that Spain plans to invest 11 billion euros ($12.4 billion) to develop microchips and semiconductors to position the country as “a vanguard of industrial and technological progress.”

An ongoing global semiconductor shortage, caused initially by the COVID-19 pandemic and made more pressing by Russia’s invasion of Ukraine, has gripped the world, and according to numerous reports, will last until at least 2023. While the shortage is impacting nearly every relevant sector from Wi-Fi access points to smartphones, one of the heaviest — and earliest — hit was the automotive industry.

Automotive represents roughly 10% of Spain’s gross domestic product, making it Europe’s second-largest auto market, according to Bloomberg. According to Sanchez, the supply of gases needed for making semiconductors like argon and neon has been disrupted by the war on Ukraine, piling on the struggles for Spain as it seeks to rebound from the pandemic. Due to the country’s reliance on tourism, it suffered more than most other European counties when borders closed and travel stopped.

Several chip makers have announced their own investments, many of them looking to establish new fabrication plants. Intel, for instance, said it will invest $20 billion to build two new chip factories in Arizona and is all together overhauling its manufacturing strategy, while Samsung plans to build a $17 billion chip fab either in its home country or one of three U.S. cities, Austin, Phoenix or somewhere in Western New York.

Sanchez didn’t offer many details about Spain’s investment, but said the fund, financed through European Union pandemic relief funds, will be approved by his cabinet “soon.”

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