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Mircrochip Technology gets $162M in CHIPS funds for plants in Colorado, Oregon

Since taking office, President Joe Biden has emphasized funding for semiconductor manufacturers in an effort to bring high-tech innovation back to the United States. File photo by Al Drago/UPI
Since taking office, President Joe Biden has emphasized funding for semiconductor manufacturers in an effort to bring high-tech innovation back to the United States. File photo by Al Drago/UPI | License Photo

Jan. 4 (UPI) -- The Biden administration on Thursday granted the latest round of funding from the CHIPS and Science Act to an Arizona-based microchip company to expand operations in Oregon and Colorado.

The White House announced $162 million in funds to Microchip Technology which it said was expected to triple the company's production capacity and create more than 700 new jobs in the respective states.

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"By making this investment, the Biden-Harris administration is addressing a vital link in our technology supply chain that impacts millions of American consumers and businesses," White House national economic adviser Lael Brainard said.

Microchip Technology, produces components for a wide range of consumer and defense products that are deemed critical to the future of U.S. manufacturing, including electric vehicles, smart devices, computers, internet routers, medical devices, and other digital items.

The latest funding under the measure, which will be distributed in increments by the U.S. Commerce Department, includes $90 million to expand a Colorado plant, and $72 million that will aid an $800 million expansion already underway at Microchip's semiconductor plant in Gresham, Ore., where 900 are employed.

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A significant portion of the money remains unallocated in the first major grant to an Oregon manufacturer under the multi-billion dollar CHIPS Act.

The CHIPS Act aims to ramp up manufacturing in fields like semiconductors, clean energy, critical minerals, biotechnology, precision medicine, artificial intelligence, and quantum computing.

In the first round of distribution in December, Commerce Seretary Gina Raimondo announced a $35 million grant to boost production of microchips for fighter jets at a New Hampshire manufacturing plant, saying the United States was "dangerously" dependent on foreign suppliers.

"In order to defend our great country, we need to make the chips that go into military equipment in the United States of America, by Americans," Ms. Raimondo said at the time. "And that's what this is about."

Meanwhile, the Oregon investment was the latest windfall for Microchip Technology as sales in the first six months of the current fiscal year reached $4.5 billion, marking a 13% increase for the company since January 2023.

The Semiconductor Industry Association hailed the new funding in a statement from President and CEO John Neuffer.

"Today's announcement will help propel semiconductor manufacturing projects in Colorado and Oregon and reinforce America's chip supply chains for critical automotive, medical, aerospace, and defense technologies, among other applications," he said.

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Oregon is also seeking funding to set up a lithography research center and support growth plans of other tech manufacturers.

"This is going to be a big shot in the arm to the state's economy," Sen. Ron Wyden, D-Ore., told the Oregonian. "I think this is a big shot in the arm for the state," while emphasizing that President Joe Biden's policies were working to bring tech jobs back home.

"We are showing that we can come through on reshoring," he said.

The investments will also help advance Biden's goal of "making semiconductors in America again and reducing reliance on global supply chains that led to price spikes and long wait lines during the pandemic," the White House said.

The Biden administration is expected to announce at least a dozen more multi-million dollar grants to expand chip-making across the nation, helping other major tech manufacturers.

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