US Invests $162 Million in Microchip Technology to Bolster Domestic Semiconductor Production

Microchip Technology is set to receive a major boost from the US government, with a planned $162 million award to expand its domestic production of legacy semiconductors. This significant investment marks a crucial step in the US’s efforts to regain its footing in the global chipmaking industry.

The funding comes from the CHIPS Act of 2022 (hashtag: Chips for America), a bipartisan initiative allocating $52.7 billion to incentivize domestic semiconductor manufacturing.

Microchip’s project aligns with the Act’s focus on legacy chips, older but still essential components used in various applications, from automobiles and appliances to medical devices and defense systems.

Microchip’s Expansion Plans

The awarded funds will support tripling the company’s domestic production of legacy chips. It will also create hundreds of new jobs in the US semiconductor industry.

More so, the project is expected to strengthen the supply chain for critical components, reducing reliance on foreign manufacturing countries like China.

However, the United States government has seen a decline in its semiconductor production capacity in recent decades, raising concerns about national security and economic competitiveness.

The CHIPS Act aims to reverse this trend by making the US a more attractive location for chipmakers. In addition, the microchip’s project will also serves as a positive example of how the Act can incentivize domestic production and create jobs.

According to Microchip’s CEO, Ganesh Moorthy, he expressed his gratitude for the government’s support by saying:

This award is a significant validation of our commitment to American manufacturing and technological leadership. We are excited to expand our domestic production and create good-paying jobs in the US.

He also hailed the award as “a direct investment to strengthen our national and economic security.”

Furthermore, industry experts also view the move positively: “this is a major win for the US semiconductor industry,” said G. Mason, an analyst at Semiconductor Insights. “Microchip is a leading player in the legacy chip market, and this investment will help ensure a stable supply of these critical components for years to come.”

The US government’s investment in Microchip Technology is a promising step towards rebuilding America’s semiconductor industry. By supporting domestic production of essential components, the CHIPS Act has the potential to strengthen the US economy and enhance national security.

Lastly, do note that the award to Microchip is the second major investment under the $52.7 billion program’s CHIPS Act “Chips for America”, that congress approved in August 2022 to subsidise semiconductor manufacturing and research.

The Act is also expected to generate billions of dollars in private investment in the US semiconductor industry. The Biden administration has made reviving American manufacturing a key priority.