The Department of Commerce (DoC) said today it has reached an agreement with Microchip Technology Inc. to provide about $162 million in Federal incentives under the CHIPS and Science Act – marking the agency’s second funding announcement under the law.
President Biden signed the CHIPS and Science Act into law in August 2022, making up to $52 billion of funding available to incentivize semiconductor makers to establish new manufacturing operations in the United States.
The latest “non-binding preliminary memorandum of terms” (PMT) agreement will allow Microchip to significantly increase its U.S. production of microcontroller units (MCUs) and mature-node semiconductors, which are used in nearly every common electronic device. The funding will help to create over 700 direct construction and manufacturing jobs.
“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,” Secretary of Commerce Gina Raimondo said in a press release. “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.”
Microchip’s MCUs and semiconductors are used in the manufacturing of electric vehicles and other automotives, along with washing machines, smartphones, airplanes, and within the defense industrial base.
The $162 million in funding will be split across two projects: approximately $90 million to modernize and expand a fabrication facility in Colorado Springs, Colo., and approximately $72 million to expand a fabrication facility in Gresham, Ore.
According to the press release, the projects are expected to nearly triple the output of semiconductors the company produces at these sites.
“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 Advisor Lael Brainard.
“This proposed investment and others like it will help ensure that U.S. companies have a stable supply of the critical chip components they need to keep their factories running,” added Under Secretary of Commerce for Standards and Technology and NIST Director Laurie E. Locascio. “This is an example of how government and industry can work together to strengthen our economy, improve our national security, and increase the supply of high-quality jobs for American workers.”
DoC announced its first PMT funding agreement under the CHIPS and Science Act last month, awarding about $35 million to BAE Systems Electronic Systems to support the modernization of its Microelectronics Center in Nashua, N.H.
