Biden Allocates $162 Million to Scale Up Computer Chip Production in Colorado and Oregon

The Biden administration continues its push to strengthen domestic semiconductor production with a $162 million investment in Microchip Technology.

This represents the second funding round related to the 2022 law to revive US semiconductor production.

The incentives disclosed by the Commerce Department allocate $90 million to enhance a facility in Colorado Springs, Colorado, and $72 million to expand a factory in Gresham, Oregon, operated by Microchip Technology Inc., headquartered in Chandler, Arizona. This substantial investment aims to triple domestic chip production and reduce reliance on foreign manufacturing hubs.

The focus of these funds will largely support the production of microcontrollers, critical components used not only by the military but also in automobiles, household appliances, and medical devices. 

The anticipated outcome includes the creation of 700 jobs in construction and manufacturing over the next decade.

Lael Brainard, director of the White House National Economic Council, emphasized the impact on inflation, highlighting semiconductors as essential inputs for various goods crucial to the economy. 

Inflation’s Influence on Biden’s Public Approval

Brainard noted that increased chip production within the US could have mitigated supply chain disruptions that caused price hikes in items like automobiles and washing machines during the post-pandemic recovery in 2021.

While inflation rates have somewhat subsided since then, the repercussions of sudden price surges have affected President Joe Biden’s public approval. 

The CHIPS and Science Act, signed in August 2022, earmarked over $52 billion to bolster semiconductor development and manufacturing domestically, aiming to address supply chain vulnerabilities.

Earlier in December, the Commerce Department unveiled the initial grants, directing $35 million to BAE Systems to expand a New Hampshire facility producing chips for military aircraft such as F-15 and F-35 jets.

Government officials foresee further funding commitments in the pipeline this year, signaling a concerted effort to fortify the country’s semiconductor industry and address the persistent challenges within the global supply chain.