Microchip Technology won $162 million in subsidies Thursday from the federal CHIPS Act, including $72 million for an $800 million expansion already underway at Microchip’s semiconductor factory in Gresham.
It’s the second major grant under the $52 billion CHIPS Act legislation Congress approved in 2022 and the first to an Oregon manufacturer. The U.S. Commerce Department is allocating the money in stages, through various programs established by Congress. The vast majority of the funding has yet to be designated.
Oregon is hoping for hundreds of millions more from the CHIPS Act in the coming months to help finance Intel’s expansion in Hillsboro, build a national lithography research center in Oregon and fund other manufacturers’ growth plans.
Thursday’s funding is the second big CHIPS Act funding announcement, following a $35 million grant to expand a New Hampshire factory last month. In addition to the money for the Gresham factory, Microchip will receive $90 million to expand a Colorado plant.
“With the modernization of both facilities Microchip would be able to triple the share of semiconductors the company produces domestically,” said Laurie Locascio, director of the National Institute of Standards and Technology.
The Arizona-based company employs about 900 in Gresham making relatively low-tech chips and microcontrollers that are nonetheless essential components in cars, planes, telecommunications networks, medical tools and industrial equipment.
Pandemic-era chip shortages highlighted the crucial support role this class of semiconductor plays in the nation’s supply chain and helped spur Congress to subsidize increased domestic production. Microchip’s sales totaled $4.5 billion in the first six months of its current fiscal year, up 13% from the prior year.
Oregon awarded Microchip $11 million in September for the Gresham expansion, which the company says will eventually add 300 jobs to the site.
Microchip declined to comment on the award. It scheduled a press conference for Friday. Biden administration officials said the federal money will increase the pace and scale of the company’s Oregon expansion.
“This is going to be a big shot in the arm to the state’s economy. I think this is a big shot in the arm for the state,” said U.S. Sen. Ron Wyden, a champion of the CHIPS Act in Congress and of efforts to revive Oregon’s semiconductor industry. He said it demonstrates that initiatives aimed at bringing chip production back to the U.S. are paying off.
“We are showing that we can come through on reshoring,” Wyden said.
Last year, Microchip considered seeking CHIPS Act money for a brand-new, $5 billion Gresham factory. The company ultimately decided to outsource the additional production to a contract manufacturer’s new U.S. factory instead of building its own, but Microchip proceeded with the more modest expansion plan funded Thursday.
Several other Oregon manufacturers are hoping for federal money to help finance local expansions, too. Jireh Semiconductor says it hopes to expand its Hillsboro factory with CHIPS Act money, and HP Inc. wants to bring some work back to Corvallis from Asia if it gets federal support.
Most prominently, Intel is counting on several billion dollars in CHIPS Act money to offset the cost of new factories or major expansions in Ohio, Arizona and Oregon.
Intel and Wyden have also been pushing the Commerce Department to use CHIPS Act money to establish an advanced lithography research center in Oregon. Chipmakers use lithography to imprint complex, microscopic circuitry onto silicon wafers.
During a visit to Hillsboro last spring, Commerce Secretary Gina Raimondo indicated Oregon had made a compelling case for the lithography site. But the federal agency is still in the early stages of evaluating Oregon’s bid and choosing locations for other domestic semiconductor research facilities funded by the CHIPS Act.
“It’s very competitive, but I think we made a really good case for ourselves,” Wyden said this week.
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