COLORADO SPRINGS — Microchip Technology Inc. will receive a $162 million federal incentive under the federal CHIPS and Science Act to support bringing the company’s semiconductor supply chain on-shore.
The investment will enable Microchip Technology to increase its U.S. production of microcontroller units and “other semiconductors built on mature-nodes critical to America’s automotive, commercial, industrial, defense and aerospace industries and create more than 700 direct construction and manufacturing jobs,” according to information released by the company and by the U.S. Department of Commerce this morning.
Microchip’s microcontroller units and semiconductors are components in the production of electric vehicles and other automotives, washing machines, cell phones, airplanes, and the defense-industrial base. Shortages of microcontrollers during the pandemic affected more than 1% of global GDP. By investing in Microchip, the government is “advancing U.S. economic and national security by further securing a reliable, domestic supply of these chips. The approximately $162 million in proposed CHIPS funding would be split across two projects: approximately $90 million to modernize and expand a fabrication facility in Colorado Springs, and approximately $72 million to expand a fabrication facility in Gresham, Oregon.”
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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 company said.
“One of the objectives of the CHIPS and Science Act is to address the semiconductor supply chain shortages we saw during the pandemic that put our national security at risk and led to furloughed auto workers and higher prices for consumers. 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 in a written statement. “With this proposed investment, President Biden is delivering on his promise to rebuild America’s semiconductor supply chain, creating a more secure defense industrial base, lower prices for Americans, and over 700 jobs across Colorado and Oregon.”
“This manufacturing investment in Oregon and Colorado will advance the president’s goal of making semiconductors in America again and reducing reliance on global supply chains that led to price spikes and long wait lines for everything from autos to washing machines during the pandemic,” said White House National Economic Adviser Lael Brainard.
“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.”