[News] Microchip Announces Sale of Tempe Fab; Infineon Sells Austin Plant to Foundry SkyWater for $110M

Leading U.S. microcontroller and analog semiconductor provider Microchip Technology has decided to sell its wafer fabrication facility (“Fab 2”) located in Tempe, Arizona, as stated in its latest press release. The Fab 2 site, which houses installed and operational semiconductor equipment, will be marketed under the direction of Macquarie’s Commodities and Global Markets business.

Microchip, initially set to receive USD 162 million in CHIPS Act funding from the U.S. Commerce Department to boost domestic semiconductor and microcontroller production, has paused its application due to declining sales. According to Bloomberg, it is the first known company to withdraw from the program.

The company is in the process of transferring production and technologies from Fab 2 to its other fabrication facilities—Fabs 4 and 5—located in Oregon and Colorado, respectively. These sites are expected to play a central role in Microchip’s long-term manufacturing and capacity strategies.

Microchip explained that this move aligns with its previously announced manufacturing restructuring initiative, which aims to boost operational efficiency and improve profitability.

In addition to the fab sale, the restructuring efforts also involve workforce reductions. As reported by Daily Tidings earlier this month, Microchip has announced layoffs at its Oregon and Colorado facilities, citing weak financial results due to declining sales.

Microchip produces chips for industrial and aerospace systems, consumer electronics, and automobiles, as the report from Daily Tidings indicates. The company has experienced a sharp decline in customer demand and currently possesses roughly twice the necessary inventory levels.

Microchip has released its financial results for the third quarter of fiscal year 2025. As per its press release, the company reports net sales of USD 1.026 billion, reflecting an 11.8% decline from the previous quarter and a 41.9% drop compared to the same quarter last year.

Infineon Sells Texas Fab Amid Efficiency Push

Microchip is not the only company to recently announce the sale of its fab. According to EE News, Infineon revealed in February that it has sold its 200mm wafer fab located in Austin, Texas to semiconductor foundry SkyWater Technology for USD 110 million. The report also notes that the deal includes a legacy chip supply agreement between Infineon and SkyWater. In its press release, Infineon stated that the transaction is fully in line with its manufacturing strategy, which focuses on leveraging synergies with strategic foundry partners when in-house production does not offer a competitive edge.

Read more

• [News] Microchip to Begin Layoffs March 3 Amid Falling Sales and Inventory Surplus
• [News] European Chip Giants NXP and STMicroelectronics Plan Layoffs Amid Market Downturn

(Photo credit: Microchip)