Dive Brief:
- The Department of Commerce announced plans on Thursday to offer $162 million to semiconductor maker Microchip Technology as part of the CHIPS and Science Act.
- The funds will help the chip manufacturer to increase domestic production of microcontroller units and other related semiconductor products that support the automotive, commercial, industrial, defense and aerospace industries.
- Microchip will split the money across two previously announced factory expansion projects: $90 million will be spent on a fabrication facility in Colorado Springs, Colorado, and $72 million on a fab in Gresham, Oregon.
Dive Insight:
Microchip plans to create over 700 jobs as part of its use of the money, which will also go towards building a domestic supplier network, according to the release.
“This funding, which is only a fraction of the additional private investment that Microchip is making in these projects, will boost Microchip’s production nearly three-fold,” National Economic Adviser Lael Brainard said in a statement.
In February, the chipmaker announced plans to invest $880 million to expand its silicon carbide and silicon production capacity at its Colorado Springs facility. The company plans to upgrade its campus by installing technology that will run on 8-inch wafers instead of 6-inch wafers, which will enable Microchip to make more products while reducing manufacturing costs.
A month later, Microchip announced it had reached the halfway point of its $800 million project to triple its production capacity at the Gresham facility. The company has been expanding and upgrading the fab to produce higher volumes of its microcontroller chips, analog and security products.
“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,” President and CEO Ganesh Moorthy said in a statement. “As a US-based company, Microchip’s operations will continue to bolster the national semiconductor supply chain, as well as develop and expand our workforce.”
Since the Commerce Department opened CHIPS Act applications last year, the agency has received over 570 statements of interest and more than 170 pre-applications, full applications and concept plans for CHIPS incentives. Last month, the White House awarded its first grant under the law for $35 million to defense contractor BAE Systems.
