The Biden administration is granting $162 million to Microchip Technology (NASDAQ:MCHP) for domestic chip production, following a 2022 law to revive U.S. semiconductor manufacturing. Microchip Technology manufactures microcontroller, mixed-signal, analog, and Flash-IP integrated circuits.
The funding includes $90 million for a Colorado plant and $72 million for the expansion of its factory in Oregon. The grant aims to triple Microchip’s domestic production and reduce reliance on foreign factories. The investments focus on microcontrollers used in various applications and are expected to create 700 jobs over the next decade.
Lael Brainard from the White House National Economic Council believes that the funding could tame inflation and mentioned that more chip production in the U.S. could have mitigated supply issues that increased prices across the board after the 2021 pandemic.
Biden signed the CHIPS and Science Act in August 2022, allocating over $52 billion for semiconductor development and manufacturing in the U.S.
Is MCHP a Good Stock to Buy?
Analysts remain bullish about MCHP stock with a Strong Buy consensus rating based on 12 Buys and four Holds. In the past year, MCHP stock has increased by 20%, and the average MCHP price target of $88.73 implies an upside potential of 4.9% at current levels.
