Microchip Technology will close its semiconductor factory in Tempe in 2025, affecting about 500 workers.
By shutting the plant, known as Fab 2, Microchip expects to save about $90 million annually starting in 2026. The Chandler-based company makes computer chips for cars and electronic devices.
Microchip founder Steve Sanghi retired as CEO in 2021 and was rehired as interim CEO last month. In a statement to investors, Sanghi said, "With inventory levels high and having ample capacity in place, we have decided to shut down our Tempe wafer fabrication facility that we refer to as Fab 2. Many of the process technologies that run in Fab 2 also run in our Oregon and Colorado factories, which both have ample clean room space for expansion.”
The Tempe plant is expected to close by September. The company has not said whether employees will be offered new jobs or receive severance packages.
Sanghi said near-term restructuring costs will between $3 million and $8 million, “and it is possible that we could incur other restructuring and shut-down costs in the future of up to an additional $15 million. The estimates of the restructuring costs will be refined over time as more information becomes available."
