The Biden Administration today announced $162 million in funding under the CHIPS and Science Act to support expansions at Microchip Technology’s semiconductor fabrication plants in Colorado and Oregon. This investment aims to strengthen domestic semiconductor production and reduce reliance on overseas chip manufacturers.
Microchip Technology Secures $90 Million for Colorado Facility Upgrade
Microchip will utilize a $90 million Department of Commerce grant to upgrade equipment at its Colorado Springs semiconductor fabrication facility, which produces microcontroller, analog, and flash memory chips.
The funding will enable a 70% increase in 8-inch wafer production at the plant over the next three years. Upgrades will focus on sustainment and improved efficiency of older 200mm wafer fabrication tools as Microchip works to meet ongoing demand for mature node semiconductors used in automobiles and industrial, aerospace and defense applications.
“This investment will help sustain and grow a vibrant U.S. semiconductor ecosystem” said Secretary of Commerce Gina Raimondo. We welcome Microchip’s commitment to increase domestic manufacturing capacity.”
| Year | Additional Wafers Per Month | Total 8″ Wafer Output |
|---|---|---|
| 2023 | 3,000 | 14,000 |
| 2024 | 6,000 | 17,000 |
| 2025 | 9,000 | 20,000 |
Microchip CEO Ganesh Moorthy called the funding “an investment in American semiconductor leadership that will enable us to strengthen domestic supply chains…”. He said it would allow Microchip to focus investments on more cutting-edge manufacturing capabilities.
Commerce Under Secretary Shawn Bennett added that projects like this help “rebuild domestic manufacturing ecosystems from the ground up.”
The announcement came amid broader efforts to reduce dependence on Asia-based foundries after pandemic disruptions highlighted risks of overseas production.
Oregon Chip Fab Gets $72 Million to Expand Staff, Facility
In Oregon, Microchip secured a $72 million Commerce Department grant to expand its 8-inch chip fabrication operations in Gresham. The funds will help add an estimated 240 jobs at the site while financing new equipment and facility upgrades.
Microchip plans to construct a 25,000 square foot annex, enabling a 30% boost in legacy chip output over the next three years. This includes increased capacity for microcontroller products used in HVAC systems, appliances, smart energy applications and other internet-connected devices.
Like the Colorado project, the Gresham facility focuses on high-reliability parts for defense, aerospace, and medical device customers along with automotive and general industrial applications.
Oregon Senator Ron Wyden championed the CHIPS Act incentives that made this investment possible. He said the funds would “bring new manufacturing jobs to Oregon while strengthening America’s domestic semiconductor industry.”
Gresham Mayor Travis Stovall called it “exciting news for local economic development” and said the expansion highlights Gresham’s strengths in high-tech manufacturing.
| Year | Additional Staff | Total Employees |
|---|---|---|
| 2023 | 80 | 1,130 |
| 2024 | 120 | 1,250 |
| 2025 | 240 | 1,490 |
Moorthy said the Oregon fab funding helps Microchip “strengthen the resilience of our manufacturing operations” while increasing production. Like the Colorado project, the announcement aligns with Microchip’s strategy of focusing capital investments on next-generation technologies while using government incentives to maximize output of mature node semiconductors still in high demand.
Investments Part of Broader US Semiconductor Push
The Microchip grants are among the first allocations from the $52 billion CHIPS Act passed last year, which authorized subsidies, research funding, and investment tax credits to bolster domestic chip fabrication and innovation.
They come amid major expansions in Arizona by TSMC and Intel, which are establishing new leading-edge fabs funded by state and federal incentives. But semiconductor executives and government leaders have stressed the need to support legacy chip production as well.
Commerce Secretary Raimondo said the Microchip funding shows the wide range of manufacturing the CHIPS law aims to strengthen. The expansions will “help us meet the growing demand for semiconductors across economies,” she said.
Industry groups also praised the investments. “This is what the CHIPS Act is all about – funding projects across the country that will strengthen semiconductor research, development, and manufacturing,” said Semiconductor Industry Association CEO John Neuffer.
As one of the first major disbursements under the law, the Microchip funding suggests further investments in bolstering domestic chipmaking may follow, benefitting chip companies and supply chain resilience.
Moorthy said the grants put Microchip “in a better competitive position globally” while allowing increased domestic output of vital components. The CEO anticipated more CHIPS Act funding opportunities ahead, saying Microchip “look[s] forward to potentially working with the Commerce Department on additional investments.”
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