US plans $162 million award to Microchip Technology to boost production UpdateUS plans $162 million award to Microchip Technology to boost production Update

The US Commerce Department recently announced a substantial financial commitment of $162 million in support of Microchip Technology. The purpose of this monetary infusion is to enhance the manufacturing capacity of microcontroller units and semiconductors, which are indispensable constituents in the realms of consumer goods and defence technology.

The provision of this funding will enable Microchip to substantially enhance their manufacturing capabilities. More precisely, their objective is to increase production of mature-node semiconductor circuits and microcontroller units by threefold at each of their manufacturing facilities located in the United States. By means of this expansion, the growing need for these critical technological components across multiple industries will be better accommodated.

The latest US Commerce Department statement emphasises the crucial relevance of components such as semiconductors and microcontroller units in a broad range of daily things ranging from vehicles and phones to home appliances, aeroplanes, and defence systems.

Commerce Secretary Gina Raimondo emphasised the need of this financial assistance in strengthening the supply chain for these critical legacy semiconductors, stressing how they are crucial in many aspects of everyday life.

This approach coincides with the United States’ strategic goal of shifting semiconductor manufacturing away from international suppliers, particularly China. The grant to Microchip Technology is part of the $52.7 billion “Chips for America” programme, which was authorised by Congress to subsidise semiconductor manufacture and research.

The contribution to Microchip is substantial, with sections earmarked for developing fabrication sites in Colorado and Oregon. Officials predict that this investment will be crucial in reducing dependence on foreign manufacturing while also aligning with the demands of several vital sectors such as automotive, defence, and aerospace.

The White House National Economic Council director, Lael Brainard, emphasised how important this award is in reducing reliance on global supply chains, which has resulted in supply shortages and price increases, particularly in items such as automobiles and appliances during the pandemic.

Ganesh Moorthy, CEO of Microchip, commended the honour, emphasising its immediate effect on improving national and economic security. This comes on the heels of Microchip’s prior vow in 2023 to considerably increase semiconductor manufacturing at its Oregon site.

Furthermore, the Commerce Department’s efforts to poll US corporations about where they get these critical legacy chips highlight the continued effort to reduce national security vulnerabilities linked with Chinese-made semiconductor components.

Secretary Raimondo also hinted at the prospect of larger funding awards in the semiconductor field into 2024, which might reshape the landscape of US chip manufacture.

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