162 million US dollars, the United States will provide subsidies to this chip company

Source: Global Semiconductor Watch

     On January 4th local time, the US Department of Commerce announced plans to provide $162 million to Microchip to strengthen its semiconductor and microcontroller unit (MCU) production. This funding is part of the US chip bill incentive measures, which will bring in over 700 related jobs while reducing dependence on foreign factories.

     In August 2022, US President Biden signed the Chip and Science Act of 2022 (referred to as the "Chip Act") into law, which will provide $52.7 billion to subsidize the US chip industry. The goal of this bill is to strengthen the US supply chain, create high paying employment opportunities, protect national security, and enhance US competitiveness.

    In December 2023, the United States announced the first allocation of funding under the Chip Act, awarding $35 million to BAE Systems for the production of fighter chip factories.

    As for the approximately $162 million chip bill funding, it will be divided into two projects: approximately $90 million for expanding Microchip‘s manufacturing plant in Colorado, and $72 million for expanding its manufacturing plant in Graysham, Oregon.

    In addition, it is understood that in early 2023, Microchip Technology announced plans to invest $800 million to double the semiconductor production of its Oregon factory.

    US officials have stated that the aforementioned investment funds will nearly double the production of microchip technology, while reducing dependence on foreign factories and strengthening supply chain resilience. Ganesh Moorthy, CEO of Microelectronics, stated that this funding is a direct investment in strengthening the national and economic security of the United States.

    However, the $162 million subsidy has not yet been finalized.

     According to data, Microchip Technology is a manufacturer of MCU, memory, and analog semiconductors, which has been launched in the United States. Its products include MCU, sequential EEPROM, sequential SRAM, KEELOQ components, radio frequency components, thermal components, power and battery management analog components, as well as wired, interface, and mixed signal components.

    White House National Economic Commission Director Lear Brainard stated that these chips are crucial to the US automotive, commercial, industrial, defense, and aerospace industries, and funding microchip technology will help reduce dependence on global supply chains.

    According to media reports, the US Department of Commerce stated last month that it is expected to release approximately 12 semiconductor chip investment subsidies in 2024, some of which amount to billions of dollars and may completely reshape US chip production.