The Biden Administration has awarded Microchip Technology (MCHP) $162 million to expand domestic chip manufacturing. The funding, which is tied to the bipartisan CHIPS and Science Act, will be used to expand the chipmaker's facilities in Oregon and Colorado.
In a statement, White House National Economic Council Director Lael Brainard wrote, "This manufacturing investment in Oregon and Colorado will advance the President’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."
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Editor's note: This article was written by Luke Carberry Mogan.
Video Transcript
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SEANA SMITH: All right. We are about 10 minutes here until the opening bell on Wall Street. Let's take a look at some of the trending tickers here on our site this morning. First up, we've got to take a look at microchip technology, because chip stocks are on the move after President Biden is doubling down on chip funding, announcing a $162 billion investment in microchip technology to expand factories in Colorado and in Oregon.
Now this is the second round of funding from the Biden administration since the CHIP Act went into effect back in 2022. Now this is the first round of funding for microchip technology. It's important to point out that that first award went to BAE Systems at just last month. But Mady, when you take into account what's happening here, obviously the Biden administration really placing an emphasis on bringing this manufacturing for chips back into the US, focusing on national security and for microchip that this funding will be for chips and will be for MCUs, which is really key to both consumer industries, but also defense industry as well.
MADISON MILLS: Right. Exactly. It's not the typical chip conversation that we talk about a lot where it's an AI-driven play here. What I think is interesting is the thinking on who the Biden administration selects for this funding. And we know that this name had already talked about building up these fabs for chip production back in February. So they've already at this work, which is really critical because this money can take a long time to get to these firms. We've heard that complaint from the previous funders that received this money.
And it could take up to five years for these factories to even get up and running. But having said that, 700 jobs created and lots of potential chip production as well, which could be really important to future proof the US.
SEANA SMITH: Yeah, certainly. And we've heard from Commerce Secretary Gina Raimondo that they plan to award more of these types of funding here going forward, saying that we should expect to make about a dozen semiconductor chip funding awards here in 2024, so this is the first.
