Microchip Technology Gets $162 Million to Expand Semiconductor Production Through the CHIPS Act

Microchip Technology Gets $162 Million to Expand Semiconductor Production Through the CHIPS Act

The Commerce Department stated on Thursday that $162 million in federal financing under the CHIPS Act for Microchip Technology Inc. (MCHP) has been approved, a step that will enhance U.S. supply chains for essential components. The money is meant to increase semiconductor and microcontroller production in order to make up for the shortages that occurred during the pandemic.

Two projects will share the $90 million CHIPS funding: the upgrading of Microchip’s Colorado Springs, Colorado, factory and the $72 million expansion of the company’s Gresham, Oregon, facility. The goal of this funding is to increase these facilities’ output capacity thrice, which will eventually lessen their reliance on imports.

The CHIPS and Science Act, Secretary of Commerce Gina Raimondo stressed, attempts to solve supply chain shortages of semiconductors that presented threats to national security during the pandemic, impacting sectors like autos and driving up consumer costs. As a major step toward strengthening the supply chain for legacy semiconductors used in a variety of applications, including defense systems, vehicles, and home appliances, the relationship with Microchip is seen.

Congress approved a second CHIPS grant for Microchip this month, the first being a $35 million grant to BAE Systems the month before. In spite of the good news, Microchip’s stock fell by about 1% as of 1 p.m. ET on Thursday, in contrast to a notable 18% rise in the previous year. The program is a part of a larger endeavor to increase domestic semiconductor manufacture and lessen dependency on foreign suppliers.


What is the history of semiconductor industry?

The history of the semiconductor industry is intriguing and stretches back to the early 1800s. German physicist Thomas Johann Seebeck discovered the thermoelectric effect that semiconducting metals naturally have in 1821. This was a significant breakthrough. Time travel to 1947, a year in which Bell Laboratories made two groundbreaking inventions: Bardeen and Brattain unveiled the point-contact transistor, and Shockley created the junction transistor in 1948. These pivotal events ushered in the transistor age and sparked a radical change in the electronics sector.

The sector gained importance as semiconductor device fabrication became become a profitable enterprise, approximately in 1960. It has developed into a strong force that propels the larger electronics industry throughout time. Forecasts suggest that by 2021, the market value of the semiconductor sector will have reached unprecedented levels, estimated to be $726.73 billion. The field of modern electronics is always evolving and changing due to this dynamic nature. Please do not hesitate to ask other questions you may have concerning the semiconductor business.

What is the future of semiconductor industry?

A number of strong factors are positioning the semiconductor sector for significant growth in the upcoming years. According to McKinsey’s analysis, the industry is expected to develop at a solid 6-8% yearly rate until 2030, which would propel it towards an astounding $1 trillion valuation. The short-term worldwide semiconductor shortfall continues, but the industry’s long-term prospects seem promising due to the growing demands of the data processing, communications, and automotive sectors.

India has set a lofty goal for itself to become the world leader in semiconductors by 2026, with an expected $80 billion in domestic consumption. With estimates of $55 billion by the same year, the Indian semiconductor business is expected to rise at a phenomenal rate. The Production Linked Incentive (PLI) plan for electronics production is one of the government initiatives that makes the Indian market attractive to semiconductor companies.

Furthermore, the rise of artificial intelligence, the popularity of remote work, and the growing need for electric vehicles will all be advantageous to the semiconductor business. Quantum computing, 5G, and the Internet of Things (IoT) are expected to progress and push the sector forward into new areas.

All things considered, the semiconductor sector seems to have a bright future ahead of it, full with prospects and growth avenues.

How do semiconductors work?

Semiconductors are unique materials that can control the flow of electricity. They are found in between nonconductors like rubber or glass and highly-conducting materials like copper or aluminum. These materials are widely used in a wide range of electronic devices, including smartphones and laptops.

The key distinguishing feature of semiconductors is their ability to conduct electricity, which is controlled by the flow and interaction of two current carriers: holes, which stand for an electron’s absence, and free electrons. Electrons in solid objects occupy energy levels that come together to form energy bands. The conduction band, which is mostly empty, and the valence band, which contains valence electrons, are particularly important in semiconductors. When thermal energy is applied, valence electrons move from the valence band into the conduction band and become free electrons.

This action simultaneously creates holes in the valence band. When subjected to heat, electrons in semiconductors can move from the valence band to the conduction band due to the close closeness of these bands, which makes it easier for electric current to flow than in nonconductors. The applied voltage and the intrinsic characteristics of the semiconducting material determine how strong this current is.

Semiconductor device manufacture is the methodical procedure by which semiconductor devices are made. There are several processes in this complex process, such as packaging, lithography, etching, photoresist, deposition, and ionization. These operations take place in highly specialized semiconductor fabrication facilities, sometimes known as “fabs” or foundries. Although silicon is the most often utilized material, different compound semiconductors are frequently needed for specialized purposes.

All things considered, semiconductors are essential to contemporary electronics, and their complex production process emphasizes how important they are to the development of technology.

What are some applications of semiconductors?

Semiconductors are essential to a wide range of electronic equipment, including radios, computers, cellphones, televisions, and more. Their many uses include the creation of solar cells, which are essential for turning sunlight into power. Semiconductors are essential to the automotive industry because they are used to create sensors that are part of airbags, anti-lock brake systems, and other safety measures. Moreover, they play a major role in the healthcare sector by enabling the production of medical devices such as glucose monitors, defibrillators, and pacemakers.

Semiconductors are used by the military industry to develop advanced radar, missile guidance, and communication systems. Semiconductors play a key role in the construction of traffic control systems, toll booths, and other infrastructure-related devices for transportation.

Aside from these uses, semiconductors are essential to the creation of LED lights, which are known for being more energy-efficient than conventional incandescent bulbs. Furthermore, semiconductors are used to create lasers, which are used in a variety of industries and fields including industrial manufacturing, scientific research, and medical operations.

All things considered, semiconductors became an essential component of contemporary technology, with a wide range of uses.

Who are some major players in the semiconductor industry?

According to an Investopedia article listing the top 10 semiconductor businesses based on their 12-month trailing sales, a small number of dominant companies dominate the semiconductor industry:

  • Taiwan Semiconductor Manufacturing Co. Ltd. (TSM): $71.66 billion in revenue.
  • Intel Corp. (INTC): Achieving $69.54 billion in revenue.
  • Samsung Electronics Co. Ltd.: $57.56 billion in revenue was reported.
  • With $25.22 billion in revenue, Broadcom Inc.
  • Qualcomm Technologies Inc.: $23.53 billion in revenue has been generated.
  • Micron Technology Inc.: $23.28 billion in revenue was achieved.
  • Texas Instruments Inc. reported $18.79 billion in sales.
  • SK Hynix Inc.: Reporting $17.98 billion in sales.
  • NXP Semiconductors N.V.: Reaching $11.68 billion in sales.
  • Advanced Micro Devices Inc.: Achieving $11.38 billion in sales.

Even if these businesses have a significant influence on the semiconductor sector, it’s important to acknowledge the involvement of a number of other participants, including Infineon, STMicroelectronics, and other contributors. The dynamic and competitive nature of the semiconductor business is reflected in this diversity, with different entities significantly contributing to the overall landscape of the sector.

What are some challenges faced by the semiconductor industry?

The semiconductor business operates in a dynamic environment that is characterized by ongoing change and a number of severe obstacles. The widespread worldwide shortage of semiconductors is a serious problem that is caused by a number of intricate elements, including supply chain disruptions, geopolitical conflicts, and the disruptive effects of the COVID-19 pandemic. The scarcity of semiconductor components has led to increased costs and longer lead times, which have significant effects on various industries, particularly the electronics and automotive sectors.

This problem is complemented by the heightened competitiveness in the semiconductor industry. A plethora of smaller businesses compete for market share, while a few major competitors control most of the sector. This fierce competition fosters an ongoing race to produce innovative products and technology. Companies must constantly innovate and take a proactive approach to stay ahead of the curve in the business due to the fierce competition.

Furthermore, the semiconductor business always has the problem of keeping up with technical developments. The landscape is defined by the quick appearance of new technologies, which forces businesses to quickly adapt in order to stay relevant and competitive. The ever-changing landscape of technology highlights the industry’s need for adaptability and a dedication to staying on the cutting edge.

To summarize, the semiconductor business faces three main challenges: a worldwide lack of semiconductors; increased competition; and the need to keep up with and integrate new technologies. A deliberate and flexible approach is needed to navigate these obstacles and maintain success in this dynamic sector.

How do I become a semiconductor engineer?

It’s crucial to remember that while these steps offer a broad framework, the specifics may change depending on the objectives of each employee and the preferences of their company.

The lucrative nature of semiconductor engineering is reflected in the average yearly compensation of ₹1,000,000 that semiconductor engineers in India command.

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2 thoughts on “Microchip Technology Gets $162 Million to Expand Semiconductor Production Through the CHIPS Act”

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