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Microchip Technology is expanding its Colorado Springs semiconductor manufacturing plant, spending $40 million to retool the facility for advanced technology that will add 50-75 jobs in the first phase of hiring.
Business Writer
Microchip Technology is expanding its Colorado Springs semiconductor manufacturing plant, spending $40 million to retool the facility for advanced technology that will add 50-75 jobs in the first phase of hiring.
A worldwide semiconductor shortage worsened by the COVID-19 pandemic has produced a major turnaround for a Colorado Springs plant that slashed more than 200 jobs two years ago.
Microchip Technology announced plans Wednesday to spend $40 million retooling its Colorado Springs semiconductor plant with new technology that will result in adding 50 to 75 employees during the next six months. The Chandler, Ariz.-based company said it will be installing equipment to move from 6- to 8-inch diameter wafers that will nearly double the number of chips it can produce.
“This will make this site more cost-competitive in the future,” said Rod Schroeder, the plant’s operations director. “The move to 8-inch wafers will be transformative for this factory. We are moving a couple of generations ahead with our technology. It enables us to be a long-term player in Colorado Springs and creates a lot of opportunity here.”
The jobs range from production specialists that require a high-school diploma or GED and pay $16-$26.56 an hour to senior engineering positions that require a bachelor’s degree in electrical or computer engineering and 15 years of experience and pay an annual salary of $116,000-$171,442, according to listings of Microchip’s website.
Schroeder said the company plans to continue hiring beyond the 50-75 planned during the next six months with another phase of expansion during the next two to five years. Brian Thorsen, a Microchip spokesman in Arizona, said the number of hires and details of the expansion are “difficult to predict, given the state of the industry with the supply shortage.”
Cecilia Harry, chief economic development officer of the Colorado Springs Chamber & EDC, said Microchip began working with the chamber late last year about the expansion, which could result in “many additional jobs over the upcoming years,” according to a chamber news release.
The company “has lots of choices on how and where to invest and Colorado Springs made the most sense for this investment,” she said. “We look forward to supporting the organization as they grow and increase their global competitiveness in the semiconductor industry.”
Microchip had cut 200-275 jobs in early 2020 as part of a restructuring that shifted high-volume chips produced in Colorado Springs to plants Microchip operates in Arizona and Oregon and moved production of products and technologies from older plants acquired in a 2018 acquisition. Those moves turned the Colorado Springs plant into “a specialty or boutique fab focusing on manufacturing automotive, military and aerospace products,” according to a company statement at the time.
The cuts came resulted from declining sales of the chips produced in Colorado Springs as customers shifted to products based on more advanced technologies. At the same time, a trade war between the U.S. and China had resulted in tariffs that reduced demand for chips and was quickly followed by a steep sales slump during the early stages of the pandemic. By the time Microchip completed the moves, the Colorado Springs plant employed about 500 people.
However, chip demand came roaring back in late 2020 and Microchip began recalling laid-off workers and adding new hires at the local plant in early 2021, boosting employment to about 700. The 50-75 jobs the company plans to add later this year will nearly restore staff at the plant to the levels before the 2020 job cuts, Schroeder said.
The plant makes chips used in everything from garage-door openers and clocks to James Webb space telescope and the Perseverance Rover used on Mars. As demand for chips has accelerated, Microchip also has moved production of radiation-hardened chips used in space applications and silicon carbide diodes used in electric vehicles to the plant, Schroeder said.
Sales are booming for Microchip, jumping 26% in the quarter ended Sept. 30 to a record $1.65 billion and profit more than tripling to $242 million despite what CEO Ganesh Moorthy called “ongoing manufacturing capacity restraints.” The company told stockholders in November to expect more of the same, forecasting sales of $1.72 billion to $1.78 billion and profits of $328.2 million to $340.3 million in the quarter ended Dec. 31.
Contact Wayne Heilman 636-0234
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Atmel Corp., which has operated a semiconductor manufacturing plant in Colorado Springs since 1989, passed into the history books Monday when it was acquired by Arizona-based Microchip Technology Inc. for $3.49 billion in cash and stock.
Business Writer
Business Writer
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