In a bid to fortify domestic semiconductor production, the U.S. Commerce Department announced plans to award $162 million to Microchip Technology. The funds, part of the “Chips for America” program, will support the expansion of semiconductor and microcontroller unit (MCU) production, crucial components for both consumer and defense industries.
The investment is set to triple the production capacity of mature-node semiconductor chips and MCUs at two Microchip facilities in Colorado and Oregon, addressing supply chain vulnerabilities across various sectors, including automotive, commercial, industrial, defense, and aerospace.
Commerce Secretary Gina Raimondo emphasized the significance of the award, stating, “This is a meaningful step in our efforts to bolster the supply chain for legacy semiconductors that are in everything.” The move aligns with the broader strategy of shifting semiconductor production away from foreign sources, particularly China.
The planned allocation is the second under the $52.7 billion “Chips for America” program, following a $35 million award to a BAE Systems facility in December 2022. The Microchip award, still pending finalization, includes $90 million for the expansion of the Colorado facility and $72 million for the Oregon facility.
Lael Brainard, White House National Economic Council director, highlighted the chips’ critical role in various industries and affirmed that the investment aims to reduce reliance on global supply chains, addressing issues such as price spikes and long wait times experienced during the pandemic.
Microchip’s CEO, Ganesh Moorthy, praised the award as “a direct investment to strengthen our national and economic security.” This comes on the heels of Microchip’s earlier commitment to invest $800 million in tripling semiconductor production at its Oregon facility.
The Commerce Department’s ongoing survey of U.S. companies’ sourcing of legacy chips underscores the national security aspect, particularly focusing on reducing risks associated with Chinese-made legacy chips in critical supply chains.
Commerce Secretary Raimondo anticipates additional semiconductor funding awards in 2024, some running into billions of dollars. These investments aim to reshape U.S. chip production, fostering innovation and bolstering the nation’s technological self-sufficiency.
