U.S. Department of Commerce Announces Preliminary Terms with MACOM to Help Strengthen Supply Chain Resilience for U.S. Defense and Telecommunications Industries

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The U.S. Department of Commerce signed a non-binding preliminary memorandum of terms (PMT) with MACOM Technology Solutions Inc. (MACOM) to provide up to $70 million in proposed direct funding under the CHIPS and Science Act. The proposed CHIPS funding would support the expansion and modernization of MACOM’s facilities in Lowell, Massachusetts, and Durham, North Carolina, and would create up to 350 manufacturing jobs and nearly 60 construction jobs across both states.

“Today’s announcement with MACOM is another example of how CHIPS for America is making targeted and strategic proposed investments across the semiconductor industry,” said U.S. Secretary of Commerce Gina Raimondo. “As a result of the bipartisan CHIPS and Science Act, we are strengthening U.S. supply chain security and advancing our technological leadership of the 21st century.”

Both of MACOM’s facilities that would be supported by the proposed CHIPS investment are Category 1A Trusted Foundries with the U.S. Department of Defense (DoD) and produce compound semiconductors that are important to the proper functioning of defense systems operating at high frequencies, including airborne and ground-based radar systems, as well as commercial applications such as telecommunications. The proposed projects would increase production of existing 100mm Gallium Nitride (GaN) and Gallium Arsenide (GaAs) semiconductor fabrication and introduce production of 150mm GaN. The added manufacturing capacity supported by this proposed investment would also help support that future DoD and industrial base demand for Radio Frequency (RF) and microwave GaN technology can be satisfied domestically.

“Today’s announcement showcases how the CHIPS and Science Act is enabling the United States to develop the most advanced technologies while protecting our national security and bringing economic opportunity to communities throughout the country,” said National Economic Advisory Lael Brainard.

MACOM provides company wide training, professional development, internship opportunities, and tuition reimbursement to support employee career growth and advancement. MACOM also collaborates with leading technical universities and colleges across the United States on semiconductor research projects to develop its future workforce. The proposed CHIPS funding would allow MACOM to further expand these workforce development programs across manufacturing and other technical positions.

MACOM has indicated that it plans to claim the Department of the Treasury’s Advanced Manufacturing Investment Credit (CHIPS ITC), which is 25% of qualified capital expenditures. Click here to learn more about the tax credit.

As explained in its first Notice of Funding Opportunity, the Department of Commerce may offer applicants a PMT on a non-binding basis after satisfactory completion of the merit review of a full application. The PMT outlines key terms for a potential CHIPS incentives award, including the amount and form of the award. The award amounts are subject to due diligence and negotiation of award documents and are conditional on the achievement of certain milestones. After a PMT is signed, the Department of Commerce begins a comprehensive due diligence process on the proposed projects and continues negotiating or refining certain terms with the applicant. The terms contained in any final award documents may differ from the terms of the PMT being announced today.