Microchip says it will shut Arizona facility
The Arizona company, which makes chips for products like cars and consumer devices, also said that orders have been slower than anticipated and it was revising the December quarter’s outlook.
Chipmaker Microchip Technology, which has been grappling with a sales slump, is closing a facility in Arizona, a move that could impact around 500 employees.
The Chandler, Arizona company, which makes chips for products like cars and consumer devices, also said that orders have been slower than anticipated and it was revising the December quarter’s outlook to near the low end of its original forecast of about USD 1.03 billion, according to a Bloomberg report.
Steve Sanghi, board chairman and interim CEO, said the Tempe plant would be shut down in the September 2025 quarter because “inventory levels are high and the company has ample capacity in place and the ability to expand capacity in the other facilities in the future.”
Microchip’s revenue is projected to fall 40% this year.
“Many of the process technologies that run in Fab 2 [the Tempe wafer fabrication facility] also run in our Oregon and Colorado factories, which both have ample clean room space for expansion,” Sanghi said in a media release. “We expect to be able to shut down Fab 2 in the September 2025 quarter at which time we expect that it will generate annual cash savings of approximately $90 million.”
He added that the company anticipates near-term restructuring costs to be between USD 3 million and USD 8 million from these actions, and possibly other restructuring and shut-down costs in the future of up to an additional USD 15 million.
