The US Department of Commerce (DoC) announced a plan to award Microchip Technology $162 million in grants to increase the domestic production of microcontroller units (MCUs) and other specialty semiconductors used across consumer, automotive, industrial, defence and aerospace industries.

The funding, which will be available through the CHIPS and Science Act, could also lead to the creation of more than 700 new jobs due to the expansion of two Microchip Technology factories in the US.

The DoC stated the expansion projects are estimated to nearly triple the output of semiconductors that Microchip Technology produces at the two sites, which will decrease its reliance on foreign foundries while also strengthening its supply chain.

The award to Microchip consists of $90 million to expand fabrication facilities in the state of Colorado and $72 million for the expansion of a fabrication facility in Oregon.

The DoC announced in late 2023 it would conduct a review of how US companies source semiconductors as part of an effort to shape policy designed to bolster supply chains and cut risks deemed to be posed by China.

Commerce Secretary Gina Raimondo stated the grant for Microchip Technology “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”.