Microchip’s Gresham facility, Fab 4, employs approximately 900 workers and they have been informed of the impending layoffs by Vice President Dan Malinaric. According to Malinaric, however, the job cuts would be less severe than the initially expected one-third of the workforce.
The semiconductor sector in those states has faced ongoing challenges and has seen multiple rounds of layoffs, including the loss of 1,300 job at Intel’s Hillsboro campus in October 2024.
Microchip produces chips for industrial and aerospace systems, consumer electronics, and automobiles, but has experienced a sharp decline in customer demand and currently possesses roughly twice the necessary inventory levels.
Microchip’s financial results for the third quarter of fiscal year 2025 showed sales of $1.026 billion, reflecting an 11.8% decline from the previous quarter and a 41.9% drop compared to the same quarter last year.
The US Commerce Department had planned to grant Microchip Technology $162 million in CHIPS Act funding to enhance domestic semiconductor and microcontroller unit production, but the company decided to pause its application for subsidies due to declining sales, becoming the first known company to withdraw from the program.
At the end of last year, the company revealed that it was closing its Arizona fab which would cause 500 job losses and save $90 million a year in costs. The closure has now been brought forward to May.
The current reductions will hit Microchip’s fabs in Gresham, Oregon and Colorado and its backend operation in the Philippines. Savings from the cuts will amount to about $25 million a year.
