The Biden administration continues its efforts to revive U.S. semiconductor manufacturing by providing $162 million in funding to Microchip Technology. This is the second funding announcement tied to the CHIPS and Science Act, a law designed to support domestic chip production. The Commerce Department revealed that $90 million will be allocated to improving a plant in Colorado Springs, Colorado, while $72 million will go towards expanding a factory in Gresham, Oregon.

The investment from the government aims to enable Microchip Technology to triple its domestic production, reducing its reliance on foreign factories. Specifically, the funds will be directed towards the production of microcontrollers, which are crucial components used in various industries such as the military, automotive, household appliances, and medical devices.

By increasing domestic chip production, government officials anticipate the creation of 700 construction and manufacturing jobs over the next decade. Lael Brainard, the director of the White House National Economic Council, emphasized that this funding would also contribute to taming inflation. Brainard highlighted the importance of semiconductors as a key input in many goods vital to the economy. The lack of supply in chips had caused the prices of automobiles and washing machines, among other goods, to rise as the country emerged from the COVID-19 pandemic in 2021. Although the inflation rate has since eased, the sudden price increases had a negative impact on President Joe Biden's public approval.

The CHIPS and Science Act, a bipartisan bill signed by President Biden in August 2022, provides over $52 billion to support the development and manufacturing of semiconductors in the United States. In December, the Commerce Department announced the first grants under this act, with $35 million allocated to BAE Systems. These funds will be used to expand a New Hampshire factory that produces chips for military aircraft, including F-15 and F-35 jets.

Government officials have expressed their intention to make further funding commitments this year, indicating the administration's dedication to strengthening the domestic semiconductor industry and reducing reliance on foreign suppliers. The investments in Microchip Technology and BAE Systems align with the broader goal of enhancing national security and economic stability through improved chip production capabilities.