Broadcom will ultimately not build a microchip factory in Spain.

The American integrated circuit company Broadcom will ultimately not build a microchip factory in Spain, given that talks between the company and the government have broken down, sources familiar with the situation have confirmed to Europa Press.

The decision was announced by the company itself in the summer of 2023 , following a meeting between the president of Broadcom's Semiconductor Solutions group, Charlie Kawwas , and the President of the Government, Pedro Sánchez , at La Moncloa.

Following the announcement, the government welcomed the company's decision, which, according to government sources, would result in a large-scale back-end semiconductor factory, unique in Europe , increasing the company's penetration in this niche market, and playing a strategic role in strengthening the microchip ecosystem in Spain.

The project would have involved an investment of $1 billion (around €850 million at the current exchange rate) and was intended to boost the country's "reindustrialization." However, negotiations with the company have been stalled for months, and the government has given up on this option.

The former Minister of Digital Transformation and Public Service, José Luis Escrivá (now Governor of the Bank of Spain), even indicated in early 2024 that the government was negotiating with Broadcom to locate the plant in Spain.

As the months passed, there were no updates from the Executive regarding the status of the talks with the American firm, and beyond some isolated reports pointing to Zaragoza as a possible destination for the new plant , nothing further emerged about the project.

In this regard, in addition to the Digital Transformation portfolio, the Special Commissioner for the Strategic Project for the Recovery and Economic Transformation (Perte) of Microelectronics and Semiconductors --known as Perte 'Chip' --, Jaime Martorell , also participated in the talks with Broadcom.

In this context, at the beginning of September 2024, just over a year after Kawwas announced his company's intentions in Spain via Twitter and the Government welcomed the decision and linked it to the attractiveness of the Perte 'Chip' to attract investment, a change took place at the head of the Ministry for Digital Transformation.

Specifically, Escrivá was replaced by Óscar López , a more politically inclined person for the portfolio who, according to sources consulted by Europa Press, never actually sat down at the table with Broadcom, although the talks had already been stalled for some time when he took office.

Added to this is the arrival of Donald Trump to the White House , which, according to the sources consulted, also did nothing to revive the project, quite the contrary , given the confrontational tone that has marked the US administration's relationship with Europe since the tycoon took office in the Oval Office.

In fact, in addition to failing to revive negotiations with Broadcom, Trump's intervention scuppered another project to create a joint venture with a North American company to produce chips in Spain, in which the government had planned to invest up to €400 million.

"That fell apart because of Trump. It was a very interesting operation, but in the end, it didn't work out. Right now, there's a feeling that American companies are very restricted from investing in Europe," the sources consulted argued.

Europa Press has contacted Broadcom and the Ministry for Digital Transformation regarding this information, but both parties have declined to comment.