Microcontroller manufacturer Microchip Technology has been awarded $162 million in funding from the US CHIPS and Science Act to support the onshoring of the company’s semiconductor supply chain.

The investment will allow Microchip to increase its production of microcontroller units (MCUs) and other technology in the US, for use in the country’s automotive, commercial, industrial, defense, and aerospace industries.

Of the total funding package, $90m will be spent modernizing and expanding Microchip’s fabrication facility in Colorado Springs, Colorado. The remaining $72m will be spent expanding the company’s site in Gresham, Oregon.

These upgrades are expected to create an additional 700 jobs across the two sites, 400 in Colorado and 300 in Oregon, and triple Microchip's output of semiconductors. However, the preliminary memorandum of terms (PMT) between Microchip and the Biden-Harris Administration is non-binding and subject to a due diligence process before any money is handed over.

“The funding Microchip is proposed to receive from the CHIPS and Science Act would be a direct investment to strengthen our national and economic security. As a US-based company, Microchip’s operations will continue to bolster the national semiconductor supply chain, as well as develop and expand our workforce,” said Ganesh Moorthy, President and CEO of Microchip.

The $280bn Chips and Science Act, was approved by Congress in July 2022, with $52bn of the overall funding package designated as subsidies for US semiconductor manufacturers. Funding from the Act has also been earmarked for semiconductor R&D, growing a skilled semiconductor workforce, and incentives for the manufacturing of semiconductors and specialized tooling equipment.

“One of the objectives of the CHIPS and Science Act is to address the semiconductor supply chain shortages we saw during the pandemic that put our national security at risk and led to furloughed auto workers and higher prices for consumers,” said Secretary of Commerce Gina Raimondo. "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.”