The funds will allow Microchip to triple production of
mature-node semiconductor chips and microcontroller units at two U.S.
factories, officials said.
The components are crucial for cars, washing machines, cell
phones, internet routers, airplanes, and the defense-industrial base.
The award "is a meaningful step in our efforts to
bolster the supply chain for legacy semiconductors that are in
everything," Commerce Secretary Gina Raimondo said in a statement.
The announcement comes as the United States wants to shift
production of such chips from foreign sources like China.
The award, not yet finalised, is the second in a $52.7
billion program, "Chips for America", that Congress approved in
August 2022 to subsidise semiconductor manufacturing and research.
The first award, of $35 million to a BAE Systems (BAES.L)
facility to produce chips for fighter planes, was announced in December.
The planned award to Microchip, which consists of $90
million to expand a fabrication facility in Colorado and $72 million for
expansion of a similar facility in Oregon, will help cut reliance on foreign
production, officials said.
The chips are crucial for the U.S. automotive, commercial,
industrial, defense, and aerospace industries, said Lael Brainard, White House
National Economic Council director.
The award will help reduce "reliance on global supply
chains that led to price spikes and long wait lines for everything from autos
to washing machines during the pandemic," Brainard added.
In a statement, Microchip's CEO, Ganesh Moorthy, hailed the
award as "a direct investment to strengthen our national and economic
security."
It comes after Microchip announced plans early in 2023 to
invest $800 million to triple semiconductor production at its Oregon facility.
In January, the Commerce Department said it planned to
survey how U.S. companies are sourcing so-called legacy chips -
current-generation and mature-node semiconductors.
The survey aims to "reduce national security risks
posed by" China and will focus on the use and sourcing of Chinese-made
legacy chips in the supply chains of critical U.S. industries.
Last month, Raimondo told Reuters she expected to make about a dozen semiconductor chips funding awards in 2024, including some running into billions of dollars that could drastically reshape U.S. chip production. -Reuters
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