Microchip Technology Inc. has reached a non-binding preliminary memorandum of terms (PMT) with the Biden-Harris Administration to receive about $162 million in federal incentives under the CHIPS and Science Act.
It is the second PMT announcement from the Department of Commerce (DOC) for funding from the CHIPS Act after BAE Systems received $35 million in December of 2023.
The investment will allow Microchip to increase its manufacturing of microcontrollers and other specialty semiconductors on mature nodes for sectors like automotive, commercial, industrial, defense and aerospace industries. The incentives will create more than 700 direct construction and manufacturing jobs.
“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,” said Gina Raimondo, U.S. Secretary of Commerce. “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.”
The Biden-Harris Administration said the investment in Microchip will help:
- Advance the U.S. economy
- Shore up national security
- Create a reliable supply of domestic chips
- Microchip’s MCUs are used in critical components in the production of manufacturing of electric vehicles, washing machines, smartphones, aerospace and the defense-industrial base.
Where it will go
Under the PMT, the $162 million in proposed CHIPS funding would be split across two projects: About $90 million to modernize and expand its Colorado Springs, Colorado, fab; and about $72 million to expand Microchip’s Gresham, Oregon fab.
The projects will nearly triple the output of semiconductors from these fabs. This will decrease the U.S.’ reliance on foreign foundries while strengthening its domestic supply chain, DOC said.
