Microchip Technology Incorporated (NASDAQ:MCHP) will receive incentives worth $162 million from the U.S. Commerce Department to support the onshoring of the company’s semiconductor supply chain.
“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,” said Secretary of Commerce Gina Raimondo.
This investment would enable Microchip to significantly increase its U.S. production of microcontroller units (MCUs) and other specialty semiconductors built on mature-nodes critical to America’s automotive, commercial, industrial, defense, and aerospace industries and create over 700 direct construction and manufacturing jobs, according to a statement from the U.S. Department Of Commerce.
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Microchip’s microcontroller units and mature-node semiconductors are critical components in producing and manufacturing electric vehicles and other automotives, washing machines, cell phones, airplanes, and the defense-industrial base.
The approximately $162 million in proposed CHIPS funding would be split across two projects: roughly $90 million to modernize and expand a fabrication facility in Colorado Springs, Colorado, and approximately $72 million to expand a fabrication facility in Gresham, Oregon.
The projects are estimated to nearly triple the output of semiconductors the company produces at these sites, decreasing its reliance on foreign foundries, strengthening supply chain resilience, and creating good-paying jobs in construction and manufacturing.
“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,” Raimondo added.
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Price Action: MCHP shares are trading lower by 1.22% to $83.54 on the last check Thursday.
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