Summary
Microchip Technology Inc. (MCHP) announced on June 11, 2009, the final approval received on June 8, 2009, for an eight-year extension of its Strategic Investment Program (SIP) Contract for its semiconductor manufacturing facility, Fab 4, located in Gresham, Oregon. This extension pushes the SIP's expiry date from June 30, 2010, to June 30, 2018, providing significant long-term tax benefits. The SIP contract grants Microchip a partial property tax exemption on Fab 4, a substantial 140-acre campus with extensive manufacturing capabilities. Under the agreement, the company will pay property tax on the first $100,000,000 of the facility's assessed value, with this taxable base increasing annually by three percent. This extension is crucial for continued operational cost management and is contingent upon Microchip meeting specific employment levels and adhering to a first-source hiring agreement at the Gresham facility.
Key Highlights
- 1Microchip Technology Inc. secured an eight-year extension for its Strategic Investment Program (SIP) Contract for its Fab 4 semiconductor manufacturing facility in Gresham, Oregon.
- 2The SIP contract extension is effective until June 30, 2018, moving the prior expiration date of June 30, 2010.
- 3The extension provides Microchip with a partial property tax exemption on its Fab 4 facility.
- 4Under the SIP, Microchip will pay property tax on the initial $100,000,000 of assessed value, which will escalate by 3% annually.
- 5Key compliance requirements for maintaining the SIP include meeting minimum employment levels and adhering to a first-source hiring agreement at Fab 4.
- 6The Fab 4 facility is a significant operation, encompassing approximately 140 acres with over 826,500 square feet of buildings, including 200,000 square feet of clean room space.