The Biden administration announced an agreement with semiconductor producer Microchip Technologies to expand its domestic production capacity of legacy chips, supported with $162 million in financial incentives funded through the CHIPS and Science Act.
This is the second agreement announced as part of the CHIPS Act. It will enable Microchip Technologies to nearly triple its U.S.-based production of microcontroller units (MCUs) and other specialty semiconductors, according to information from the National Institute of Standards and Technology (NIST).
The project funds would involve about $90 million to modernize and expand a fabrication facility in Colorado Springs, Colorado; and another $72 million to expand a similar facility in Gresham, Oregon, according to the NIST release. “The projects are estimated to nearly triple the output of semiconductors the company produces at these sites, decreasing its reliance on foreign foundries and strengthening supply chain resilience, and creating good-paying jobs in construction and manufacturing,” the agency said.
The company’s MCUs and mature-node semiconductors are used in production and manufacturing of cell phones, electric and other vehicles, washing machines, airplanes and in the defense-industrial space. “Today’s announcement with Microchip is a meaningful step in our efforts to bolster the supply chain for legacy semiconductors that are in everything from cars, to washing machines, to missiles,” said Secretary of Commerce Gina Raimondo.
“Microchip Technology manufactures semiconductors that are the backbone of electronic applications across vital industries like aerospace and defense, automotive, and medical. Microchip’s fabs in Colorado and Oregon, among others, perform specialized manufacturing as well as additional reliability and safety qualification for products designed for such mission-critical markets,” said Ganesh Moorthy, president and CEO of Microchip. “The funding Microchip is proposed to receive from the CHIPS and Science Act would be a direct investment to strengthen our national and economic security. As a U.S.-based company, Microchip’s operations will continue to bolster the national semiconductor supply chain, as well as develop and expand our workforce.”
The government said that it has received more than 570 statements of interest and more than 170 pre-applications, full applications and concept plans for CHIPS-related incentives, and is in the process of evaluating and announcing individual “preliminary memoranda of terms,” or PMTs, such as the one announced today with Microchip Technologies. More such announcements are expected throughout 2024.