Microchip Nabs $162M To Keep Chips For Washing Machines – And Missiles – Flowing

Microchip will receive $162 million of US CHIPS and Science Act funding to bolster domestic production of microcontrollers used in both commercial and military applications.

The award, announced as part of a preliminary memorandum by the US Commerce Department Thursday, will support the expansion of two US fabs. The first, located in Colorado Springs, will receive about $90 million. Meanwhile a second site – in Gresham, Oregon – is slated to receive $72 million.

According to Microchip CEO Genesh Moorthy, these facilities perform specialized manufacturing services in addition to safety qualification for products involved in mission-critical markets.

The Department of Commerce estimates the funding will create approximately 700 new jobs in Colorado and Oregon – assuming Microchip can find folks to fill them – and roughly triple the chip shop's output of semiconductors when upgrades are completed.

Headquartered in Chandler, Arizona, Microchip offers a wide variety of semiconductor services including those used in aerospace and military applications. One of the more notable examples includes NASA's High-Performance Spaceflight Computer (HPSC), which was developed using SiFive's RISC-V designs and will be built by Microchip. The computer will eventually replace the aging RAD750 PowerPC microprocessor on future manned and unmanned missions to the Moon and Mars.

In a statement talking up the award, US Commerce Secretary Gina Raimondo reiterated that one of the key goals behind the $53 billion CHIPS Act was to address supply chain vulnerabilities uncovered by the COVID-19 pandemic and bolster the nation's strategic semiconductor supply.

"Today's announcement with Microchip is a meaningful step in our efforts to bolster the supply chain for legacy semiconductors that are in everything from cars to washing machines to missiles," she declared.

While the Commerce Department has announced the award, it'll be a bit longer before Microchip gets its hands on the cash. The preliminary offer is non-binding and subject to a due diligence process.

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The announcement comes weeks after the Commerce Department awarded BAE Systems' American subsidiary with $35 million in CHIPS funding to bolster production of several mature-node chips used in military applications like the F-35 jet.

The Department is expected to announce additional awards over the next year. But while most of the $39 billion in CHIPS subsidies is still up for grabs, TSMC, Samsung, and Intel – all of which are building large fab sites in the US – are expected to take home the lion's share. ®