U.S. Commerce Department Boosts Microchip Technology
The U.S. Commerce Department has unveiled plans to award Microchip Technology a substantial $162 million grant to enhance domestic semiconductor and microcontroller unit (MCU) production, critical for consumer and defense industries.
Empowering Microchip’s Expansion
This financial injection empowers Microchip technology to triple its production of mature-node semiconductor chips and MCUs across two U.S. facilities. These components play pivotal roles in diverse products such as cars, washing machines, cell phones, internet routers, airplanes, and defense systems.
Gina Raimondo, the Commerce Secretary, underscores the award’s significance as a substantial step toward fortifying the supply chain for widely used legacy semiconductors. The U.S. strategically seeks to diminish dependence on foreign sources, particularly China, for these crucial chips.
This funding initiative is part of the “Chips for America” program, a massive $52.7 billion venture approved by Congress in August 2022 to subsidize semiconductor manufacturing and research. The initial $35 million award went to a BAE Systems facility specializing in chips for fighter planes.
The proposed $162 million award to Microchip includes $90 million for expanding a fabrication facility in Colorado and an additional $72 million for a similar expansion in Oregon. The goal is to amplify domestic production capabilities and concurrently reduce reliance on intricate global supply chains.
These chips are indispensable for the U.S. automotive, commercial, industrial, defense, and aerospace sectors, emphasizing the significance of the funding initiative. Lael Brainard, the White House National Economic Council director, highlights its potential to address challenges witnessed during the pandemic, such as notable price spikes and prolonged waiting times for various products.
Ganesh Moorthy, Microchip technology CEO, lauds the award as a direct investment in reinforcing national and economic security. This development follows Microchip’s prior commitment in 2023 to invest a substantial $800 million in tripling semiconductor production at its Oregon facility.
In January, the Commerce Department disclosed plans to conduct a survey assessing how U.S. companies procure “legacy chips” – encompassing both current-generation and mature-node semiconductors. The survey aims to address potential national security risks tied to Chinese-made legacy chips within critical U.S. industries’ intricate supply chains.
Commerce Secretary Raimondo anticipates unveiling around a dozen semiconductor funding awards in 2024, some potentially exceeding billion-dollar figures. This holds transformative potential, reshaping the U.S. chip production landscape.
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