The latest news is that due to a sharp decline in sales, Microchip Technology plans to take a two-week leave for employees at its Gresham factory in March and may take another leave in June. This week, workers learned about this news and just a few days after Microchip received $72 million in federal funds to expand the Gresham factory.

Microchip stated that the vacation will not change the company's plan to expand its Oregon factory, but it reflects short-term issues related to customer inventory backlog. Microchip stated that it will not lay off employees.

This Arizona company has warned investors that its customers cut orders or closed their factories at the end of last year, resulting in delayed shipments until 2024 and a decrease in Microchip's quarterly revenue. The company stated that sales in the last three months of this year decreased by 22% compared to the previous quarter.

Microhip CEO Ganesh Moorthy believes on Monday that many customers and distributors took action to further reduce inventory levels in the December 2023 quarter due to the economic downturn.

Microchip focuses on producing microcontrollers and analog semiconductors, but they are crucial in many automotive, aerospace, communication, and industrial products.

After the supply chain shortage during the pandemic, the company's sales grew rapidly, and Microchip announced plans to expand its Gresham factory to meet the long-term growth in demand for its products. The sales revenue increased by 13% in the first six months of this fiscal year.

It is reported that Microchip has described the upcoming March vacation as a temporary measure aimed at helping the company overcome a brief downturn. The company has approximately 900 employees in Graysham.

This factory, established more than 20 years ago, remains Microchip's largest and most advanced internal manufacturing facility, and is also a component of the company's long-term microcontroller and simulation business strategy.

Some comments suggest that Microchip's vacation is undoubtedly a major blow to the MCU industry.

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