Microchip Technology secured $162 million in subsidies from the federal CHIPS Act, with $72 million being allocated for the ongoing $800 million expansion at Microchip’s semiconductor factory in Gresham. This marks the second major grant under the $52 billion CHIPS Act legislation, and the first to be awarded to an Oregon manufacturer. The U.S. Commerce Department is distributing the funding in stages through various programs established by Congress, with the majority of the funding yet to be designated.
Oregon is anticipating additional funding from the CHIPS Act in the coming months to support Intel’s expansion in Hillsboro, establish a national lithography research center in Oregon, and finance other manufacturers’ growth plans. This recent funding announcement follows a $35 million grant for the expansion of a New Hampshire factory last month. In addition to the funding for the Gresham factory, Microchip will also receive $90 million to expand a Colorado plant.
Laurie Locascio, director of the National Institute of Standards and Technology, stated that with the modernization of both facilities, Microchip would be able to significantly increase the share of semiconductors the company produces domestically. The Arizona-based company currently employs about 900 individuals at a 36-year-old factory in Gresham, producing essential components for various industries, including automotive, aerospace, telecommunications, medical, and industrial sectors.
The pandemic-induced chip shortages highlighted the critical role of this class of semiconductor in the nation’s supply chain, prompting Congress to support increased domestic production. Microchip's sales totaled $4.5 billion in the first six months of its current fiscal year, reflecting a 13% increase from the prior year. Furthermore, Microchip was awarded $11 million by Oregon in September for the Gresham expansion, which is expected to add 300 jobs to the site.
While Microchip declined to comment on the award, it has scheduled a press conference for the following day. Biden administration officials indicated that the federal funding will accelerate the pace and scale of the company’s Oregon expansion, which is anticipated to have a significant positive impact on the state's economy.
U.S. Sen. Ron Wyden, an advocate of the CHIPS Act in Congress and efforts to revive Oregon’s semiconductor industry, expressed his belief that initiatives aimed at bringing chip production back to the U.S. are yielding positive results. He stated that this funding demonstrates progress in reshoring chip production to the U.S.
Several other Oregon manufacturers also seek federal support for local expansions. For example, Jireh Semiconductor aims to expand its Hillsboro factory with CHIPS Act funding, and HP Inc. plans to relocate some operations from Asia to Corvallis with potential federal support.
Intel is also actively seeking several billion dollars in CHIPS Act funding to offset the costs of new factories or major expansions in Ohio, Arizona, and Oregon. Additionally, Intel and Senator Wyden are advocating for the use of CHIPS Act money to establish an advanced lithography research center in Oregon.
While Oregon is competitive in securing funding for semiconductor research facilities, the evaluation process is ongoing, and locations for these facilities are yet to be determined. Senator Wyden expressed optimism regarding Oregon's bid for the lithography site, emphasizing the state's compelling case in this endeavor.
