March 24, 2025 /SemiMedia/ — Microchip Technology Inc. has announced the sale of its Fab 2 wafer fabrication facility in Tempe, Arizona and has engaged Macquarie Group to oversee the marketing and sale process. The move is part of the company's manufacturing restructuring plan, aimed at enhancing operational efficiency and profitability. Macquarie’s Commodities and Global Markets team, known for its extensive expertise in semiconductor asset transactions, has successfully handled over 50 semiconductor fab sales.

Microchip is consolidating Fab 2’s production and technology capabilities into its Fab 4 and Fab 5 facilities in Oregon and Colorado to optimize its overall manufacturing footprint. Michael Finley, Senior Vice President of Fab Operations, stated: “The sale of Fab 2 is a critical step in resizing our manufacturing scale, allowing us to adapt to market changes and strengthen our long-term competitiveness.” Meanwhile, Microchip is also facing challenges from weakening global semiconductor demand. In the most recent quarter, Microchip’s net sales dropped 42% year-over-year, with total revenue for Q3 FY2025 at $1.026 billion, down 11.8% sequentially. To address excess inventory and weak demand, the company has also implemented workforce reductions at its Oregon and Colorado facilities and adjusted its manufacturing strategy.

In addition to the fab sale, Microchip has announced a $1.35 billion convertible preferred stock offering to strengthen its financial position, reduce dilution for common shareholders, and support general corporate purposes, including debt repayment. The company has also paused its $162 million CHIPS Act funding application to reassess its strategic priorities in light of the current market conditions.

Industry analysts believe that Microchip’s restructuring efforts will help improve capacity management and enhance long-term profitability. The company remains committed to delivering high-quality semiconductor solutions for the automotive, industrial, aerospace, and consumer electronics markets, ensuring its continued competitiveness in the global semiconductor industry.