Microchip Pauses Chips Act Application Amid Inventory Woes (1)

Microchip Technology Inc. is pausing its application for US semiconductor subsidies, making it the first known company to step back from a program designed to revitalize American chipmaking.

The struggling chipmaker was in line for $162 million in grants from the Chips and Science Act to support plants in Oregon and Colorado. Since then, it’s furloughed workers twice at facilities in Oregon and announced plans to shut down a factory in Arizona, affecting around 500 employees.

“I have put the negotiations with the Chips office on hold for now,” Chief Executive Officer Steve Sanghi said Tuesday at a UBS conference, ...