The US government plans to provide a $162 million grant to leading semiconductor company Microchip Technology to increase production of key early-model chips in the country. These chips are important for a variety of industries, including consumer electronics and defense products.
The financial support will enable Microchip to triple its production capacity for mature node semiconductors and microcontrollers. The company will direct $90 million for facility expansion in Colorado and $72 million for facility upgrades in Oregon.
By increasing domestic production of these older model chips, the United States aims to reduce its dependence on international suppliers, especially from China. The strategy is part of the “Chips for America” initiative, which is allocating $52.7 billion to revitalize semiconductor manufacturing spearheaded by Asian companies.
Government officials argue that increasing domestic chip production would reduce the risks of supply shortfalls and price increases caused by foreign dependence. Ganesh Moorthy, Microchip’s CEO, praised the grant, noting that the company had already committed $800 million to the Oregon facility at the beginning of the year.
In light of rising technological tensions between the United States and China, the Department of Commerce also announced plans to conduct a survey to examine American companies’ sourcing of older model chips made in China. This effort aims to reduce dependence on Chinese semiconductors for key domestic supply chains and identify potential risks.
