Broadcom, the chip giant, has unveiled ambitious plans to establish a wafer processing factory in Spain, potentially generating 500 job opportunities and injecting a staggering $1 billion (€920 million) investment into the country’s semiconductor and microelectronics industry. According to sources within the Spanish semiconductor industry, the multinational intends to build a large-scale facility for back-end substrates, which would be the sole one of its kind in Europe. The project is expected to proceed in two phases, with the first involving constructing the facility and introducing initial equipment lines, followed by adding additional equipment lines.
The company envisions commencing production within three years from now. Though the specific location for the factory remains undisclosed, insiders suggest that various autonomous communities in Spain have been approached by the Spanish Institute for Foreign Trade (ICEX) to express their interest in hosting the facility. Communities are also preparing proposals related to land availability, energy, and water expenses, given the energy-intensive nature of such installations.
While the extent of state aid Broadcom will receive is yet to be determined, the investment falls under the Perte chip program—a government-driven initiative to enhance Spain’s position in the strategic chip industry, mobilizing €12.25 billion by 2027.
Broadcom has reportedly requested a capital expenditure (capex) subsidy from the government, with the amount likely to align with typical figures for such projects, often around 50%. However, approval from the European Commission is mandatory for any financial contributions to the American company, adhering to the principles set out in the European Chips Act and other state aid regulations.
Vice President Nadia Calviño hailed the deal as “excellent news” and stressed its strategic significance for the country. She emphasized how the factory places Spain among European nations that will have the capability to produce semiconductors and microprocessors—crucial elements for diverse industries. The investment is believed to signal potential prosperity, job creation, and scientific advancement for Spain. Calviño expressed hope for further good news in the days to come as Spain aims to secure a position on the European map of chip manufacturing.
The announcement follows months of negotiations between Broadcom’s President Charlie Kawwas, Spanish Prime Minister Pedro Sánchez, and Perte Chip Commissioner Jaime Martorell. The latter commended Broadcom’s confidence in Spain’s strategic strengths within the sector and anticipated the decision would bolster the microchip ecosystem in the country. Martorell asserted that the government’s efforts to place Spain at the forefront of the industry were gaining traction, evident from the realization of various investments, including those by Cisco and Intel.
Broadcom’s investment has also been well-received by the Spanish Semiconductor Industry Association (Aesemi), expressing that it signifies the country’s appeal as a global semiconductor and microelectronics ecosystem. They anticipate the announcement to be the first of many successful international investments in Spain.
Notably, the factory planned by Broadcom will not be a semiconductor manufacturing plant like TSMC or Samsung. Instead, it will specialize in the back-end assembly and testing. In this phase of chip manufacturing, chips are encapsulated and tested for reliability and connectivity with other circuit components. The factory finalizes the production of the end product in the semiconductor supply chain.
Broadcom’s strategic decision to invest in Spain is expected to strengthen Europe’s position in the assembly and testing segment, where it currently lags behind China and Taiwan. By contributing significantly to Europe’s strategic autonomy in the semiconductor sector, the investment promises to revolutionize the European semiconductor industry’s future.