US Provides Second Semiconductor Act Subsidy for Microchips... $160 Million

U.S. semiconductor company Microchip Technology has received a subsidy under the CHIPS and Science Act (CSA) from the Joe Biden administration. This is the second such subsidy since the law's implementation.

On the 4th (local time), the U.S. Department of Commerce announced that it had signed a Preliminary Memorandum of Transaction (PMT) to provide Microchip Technology, a semiconductor company headquartered in Arizona, with a subsidy of $162 million (approximately 212.5 billion KRW). This is the second subsidy under the CSA, following the first announcement last month of a $35 million subsidy plan for BAE Systems' factory in New Hampshire.

Through this subsidy investment, Microchip Technology will be able to expand production of essential microcontroller units (MCUs) and mature node semiconductors used in automobiles, airplanes, home appliances, medical devices, and military equipment. Commerce Secretary Gina Raimondo emphasized in a statement, "Today's announcement marks a significant step forward in our efforts to strengthen the legacy semiconductor supply chain used in everything from cars to washing machines to missiles."

Microchip Technology plans to invest $90 million to modernize its semiconductor manufacturing facility in Colorado Springs and $72 million to expand its manufacturing facility in Gresham, Oregon. The Biden administration expects that production capacity at these two facilities will triple, reducing reliance on overseas foundries (semiconductor contract manufacturing). The scale of job creation is also estimated to exceed 700 positions. Microchip Technology is considered one of the largest suppliers of semiconductors to the foundational defense industry.

The CSA aims to support companies building production facilities domestically to expand the U.S. semiconductor supply chain by providing a total of $52.7 billion over five years, including $39 billion in semiconductor production subsidies and $13.2 billion in research and development (R&D) grants. Previously, the Department of Commerce received over 500 letters of intent from related companies and is reviewing them to finalize subsidy recipients. Approximately 12 subsidies are expected to be confirmed this year alone. Local media, including The New York Times (NYT), reported that the Department of Commerce plans to announce subsidy plans within months for major semiconductor companies such as Intel and TSMC, which have recently expanded investments in the U.S.

This content was produced with the assistance of AI translation services.