MADRID, July 14 (Reuters) - U.S. chipmaker Broadcom ( AVGO )

has pulled out of plans to invest in a microchip plant

in Spain as talks with the government have broken down, news

agency Europa Press reported on Sunday citing unidentified

sources.

Spain's Digital Transformation Ministry and Broadcom ( AVGO ) did not

immediately respond to requests for comment.

The Europa Press report did not say why the talks had broken

down.

The decision will be a blow for Spain's ambition to become a

relevant player in the microchip industry in Europe. The

government has previously said it would allocate some 12 billion

euros ($14 billion) for the semiconductor and microchip

industry, using some of the European Union's pandemic relief

funds.

Broadcom ( AVGO ) announced the investment two years ago but did not

say how much it would invest. The government said at the time

the project could be worth $1 billion and include the

construction of "large-scale back-end semiconductors facilities

unique in Europe".

($1 = 0.8559 euros)