Broadcom’s recent decision to cancel its proposed $1 billion assembly, testing, and packaging (ATP) facility in Spain highlights the complexity of Europe’s semiconductor ambitions. While the move may reflect specific negotiation challenges, it also brings attention to broader structural issues affecting the region’s efforts to strengthen its chip manufacturing capabilities.
A Missed Opportunity for Spain
The ATP facility, announced as part of Spain’s €12.25 billion PERTE Chip program, was intended to support the development of the country’s semiconductor value chain. Its cancellation suggests the project may have faced deeper feasibility concerns, beyond just stalled talks. Despite being less capital-intensive than full-scale fabrication plants, the investment ultimately did not proceed—indicating potential limitations in Spain’s readiness to host such facilities.
Spain has made progress in targeted areas, such as photonics and optoelectronics, and has invested in research and workforce development. However, large-scale manufacturing projects remain elusive. In comparison, countries like Germany have attracted major fabs from Intel and TSMC, supported by long-established industrial ecosystems and substantial state backing.
EU Strategy: Ambitious but Fragmented
At the EU level, the Chips Act aims to double Europe’s global market share in semiconductors to 20% by 2030, backed by over €43 billion in planned public and private funding. However, only a small portion—about 5%—is directly managed by the European Commission. The majority relies on national governments and private sector participation, creating a decentralized landscape with varied outcomes across member states.
This structure makes coordination challenging and may inadvertently reinforce existing industrial strengths, particularly in regions like Saxony in Germany or Ireland. The European Court of Auditors has raised concerns about the achievability of the 20% target, forecasting a more modest rise to around 11.7% by 2030.
Global Competition and Geopolitical Influence
The international context also plays a significant role in shaping investment decisions. U.S. policy, particularly through the CHIPS and Science Act, has created strong financial incentives for companies to prioritize domestic projects. This policy environment, combined with broader trade and geopolitical considerations, may influence how U.S.-based firms evaluate overseas investments—including those in Europe.
Broadcom’s withdrawal from Spain may reflect a range of such factors, including global shifts in risk assessment, corporate strategy, and national policy incentives.
Ecosystem Development: A Long-Term Process
Spain’s experience illustrates the broader challenge of building semiconductor ecosystems in regions without an established base. While funding is essential, attracting large-scale manufacturing often depends on a combination of factors: infrastructure, supply chains, talent pools, and proximity to major customers. These elements typically develop over time and may not be easily replicated through financial incentives alone.
The case highlights a broader issue for emerging regions in Europe—namely, how to balance long-term capability-building with the immediate need to attract anchor investments.
A Path Forward
The cancellation of Broadcom’s Spain project may slow momentum in the short term, but it also offers an opportunity for reflection. It reinforces the importance of aligning national strategies with ecosystem development, while acknowledging the influence of global economic and geopolitical dynamics.
As Europe continues its push for semiconductor resilience, a coordinated, long-term approach—combining policy, infrastructure, and industry collaboration—may prove essential to building sustainable capacity across the continent.
