March 20, 2025, U.S. time, Microchip Technology Inc. (Nasdaq: MCHP) has announced plans to sell its Tempe, Arizona wafer fabrication facility, known as "Fab 2," as part of a broader restructuring strategy aimed at reducing costs and optimizing operations. The company has engaged Macquarie Group to oversee the marketing and sale of the facility.

The decision is part of Microchip's ongoing efforts to resize its manufacturing footprint. Production from Fab 2 is being transferred to the company's more advanced facilities in Oregon and Colorado, which remain critical to its long-term manufacturing strategy.

Michael Finley, Microchip's senior vice president of fab operations, emphasized that the sale marks a key step in the company's restructuring. “The closure and sale of Fab 2 is the latest development in our ongoing efforts to streamline operations and improve profitability. We believe Macquarie's extensive experience in marketing semiconductor assets positions them well to manage this sale.”

Macquarie's Commodities and Global Markets division, which has managed over 50 semiconductor facility sales, is handling the process. According to Don Trent, senior managing director at Macquarie, the site — equipped with operational 200mm semiconductor tools — presents an attractive opportunity for chipmakers looking to expand production capacity in the U.S.

The Tempe fab's location adds to its appeal, with the local industrial vacancy rate dropping to around 4% — significantly lower than the 12% rate across the greater Phoenix area, according to CoStar market data.

Microchip originally purchased the Tempe site for $5.35 million in 1993. The current sale price has not been disclosed, but interest is reportedly coming from both domestic and international buyers.

The sale follows Microchip's recent announcement of 2,000 layoffs — including 330 employees at the Tempe site — as the company works through an inventory correction. CEO Steve Sanghi, who returned as interim CEO after retiring in 2021, is implementing a turnaround plan aimed at reducing costs, improving inventory efficiency, and realigning production.

Despite these changes, Microchip remains committed to delivering high-quality products and strong technical support. The company projects annual cost savings of $90 to $100 million from the fab closure, alongside a targeted $300 million reduction in inventory by March 2026.