Microchip to close Arizona facility amid cost concerns

Microchip Technology Inc. said Monday it intends to shut down its Tempe computer chip factory as it tries to curtail costs amid an anticipated slowdown in sales.

In a regulatory filing released after the markets closed, Microchip (Nasdaq: MCHP) CEO Steve Sanghi – who moved back into the company’s top job at the end of November – said that after he did a deep dive into the Chandler-based company’s operations, he “determined that certain actions are necessary,” according to a statement emailed to the Business Journal.

Those actions include shutting down the company’s silicon wafer fabrication facility in Tempe, affecting some 500 workers. The closure is expected to occur between July and September 2025, which coincides with the company’s fiscal year 2026 second quarter. Microchip anticipates saving roughly $90 million annually by shutting down its Tempe fab, according to a Dec. 2 filing with U.S. Securities and Exchange Commission.

A Microchip spokesman would not comment Monday on the exact number of workers who would be impacted by the decision.

Microchip had already shut down the Tempe factory temporarily for two weeks earlier this year, along with its two other factories in Oregon and Colorado, in an effort to cut costs. The company expects that after shuttering the Tempe factory, manufacturing will be transitioned “as needed” to other facilities, according to the SEC filing.

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