Supervisor Elham AbolFateh
Editor in Chief Mohamed Wadie

US Grants $162 Mln in Funding to Boost Semiconductor Industry

Fri 05 Jan 2024 | 11:33 AM
Israa Farhan

The US government has announced a $162 million funding initiative aimed at supporting and expanding the domestic semiconductor (chip) industry, which plays a crucial role in both civil and advanced military applications.

This significant investment was disclosed by White House economic advisor Lyle Bernard in a statement issued by the Department of Commerce, specifically earmarked for Microchip Technology, a company specializing in chip manufacturing and microcontroller units (MCUs).

Semiconductors are essential components in various consumer and defense products, including automobiles, washing machines, mobile phones, internet routers, aircraft, and defense industrial bases.

Bernard emphasized that these units are critical components in a wide range of consumer and defense products, holding great importance for American manufacturing, including the electric sector. 

Microchip's investments in its supply chain, influenced by this funding, will have far-reaching effects, impacting millions of consumers and American companies.

The Department of Commerce is set to announce the recipients of government funding in the coming months. 

Bernard highlighted that President Joe Biden's agenda for investing in America aims to showcase its support for hardworking Americans, create quality jobs, strengthen American supply chains, and safeguard national security.

This grant is the second in the $52.7 billion "Chips for America" program approved by Congress in August 2022, aimed at supporting semiconductor manufacturing and research. 

The first award, worth $35 million, was granted to a subsidiary of BAE Systems for the production of fighter aircraft chips in December.

Officials have revealed that Microchip, a leading player in the semiconductor industry, will receive $90 million for expanding its manufacturing facility in Colorado and $72 million for a similar expansion in Oregon. 

This funding will contribute to reducing dependence on foreign production.

In a statement, Microchip's CEO, Ganesh Moorthy, praised the grant as a "direct investment to enhance our national and economic security."

This development follows Microchip's announcement in early 2023 of plans to invest $800 million to triple its semiconductor production in Oregon facilities.

In January, the Department of Commerce announced its intention to survey how American companies acquire so-called "legacy chips." This survey aims to "mitigate national security risks" posed by China and focuses on the use and supply of old Chinese semiconductor chips in sensitive American industries.

Last month, US Commerce Secretary Gina Raimondo told Reuters that she expects to grant around twelve awards for semiconductor funding in 2024, some of which could be worth billions of dollars and could fundamentally reshape chip production in the US.