Silicon Mountain: Microchip announces $880M Springs expansion

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Microchip will expand its facility on the south side of Colorado Springs. (Photo courtesy Microchip Technology)

Microchip Technology has announced an $880 million expansion to its Colorado Springs manufacturing facility, where it will grow its silicon production capacity and develop silicon carbide technologies.

The Colorado Springs Chamber & EDC made the announcement with Microchip at a ceremony Downtown Feb. 17. The silicon technologies giant was approved for state and local incentives of about $47 million for the expansion to its 50-acre, 580,000-square-foot campus on the south side of the Springs.

At the announcement, Mayor John Suthers said Microchip’s investment will grow the local economy by an annual average of $144 million, adding up to $1.4 billion over the next 10 years. It will bring 418 direct jobs (adding to its 850 employees already in the Springs) with an average wage of $72,000 — which exceeds the current average county wage by about $12,000. The expansion will also support an additional 779 new indirect jobs, he said.

“I am particularly excited to see us return to our high tech industrial roots,” Suthers said. “We are becoming Silicon Mountain once again.”

Microchip is the largest U.S. headquartered supplier of microcontrollers, with 22,000 employees worldwide and 21 manufacturing locations, half of which are in the United States. 

The Chamber & EDC worked with Colorado’s Office of Economic Development and International Trade, Colorado Springs City Council, El Paso County and Colorado Springs Utilities to secure the expansion. 

Microchip’s news comes on the heels of the Chamber & EDC’s December announcements of two other major tech expansions. Semiconductor industry giant Entegris announced a $600 million capital investment and plans for a new manufacturing center of excellence in Colorado Springs, and IT company Zivaro chose the Springs for expansion with a new business unit focusing on modernizing legacy systems that serve Space and Command Control Programs for the U.S. government.

OEDIT Executive Director Eve Lieberman said Microchip’s Colorado Springs expansion “falls in line with both state and national priorities to grow and develop a domestic semiconductors ecosystem.”

“We are becoming Silicon Mountain once again.” — Mayor John Suthers

Kelly Leaverton, the Chamber & EDC’s senior VP of Operations, said Microchip is a world leader in smart, connected and secure embedded technologies, with over 120,000 customers across industry, aerospace and defense, communications, automotive and computing. “Their products truly make the world go round,” he said.

“Many of you probably do not realize that when you woke up this morning and made coffee, you were probably using a Microchip device in that appliance,” said Rich Simonsic, senior VP of Microchip’s Analog Power and Interface Business Unit.

“When you stepped into your car and used your keyless entry, you were using a Microchip device. Your anti-lock brakes, your seat heaters, your steering wheel heater are all driven by Microchip technology. Any HID [Human Interface Device] that you touch in that car to make something move is Microchip technology. When you heard about the Mars Rover running around on Mars, there are over 100 chips from Microchip Technology on that Mars Rover.

“Until the last few years I think most people didn’t recognize just how dependent we all are on semiconductor technology in our daily lives, sustainability programs, medical technology,” he added. “There’s a great deal of advancement that’s taking place in every industry — it is vitally important to our future.”

The Springs facility currently produces products from 6-inch wafers, and the manufacturing technology that Microchip is installing here will run on 8-inch wafers, which will significantly increase the number of chips produced at the location. The additional 400 jobs anticipated at the facility will range from production specialists to technical roles in equipment procurement and management, process control and test engineering. 

Simonsic said Microchip finished last year at $8.4 billion in revenue, half of which is generated from U.S. wafer fabs, including its Springs semiconductor production facility.

“I’d like to recognize the 850 employees that we have in Colorado Springs,” he said. “The team has been magnificent in helping us grow — a lot of long hours, a lot of stress over the last year and a half trying to keep up with demand. Those people really gave it their all to make it happen.” 

Lieberman, of OEDIT, said Microchip’s $880 million capital investment “builds upon important and thriving relationships.”

“In the wake of the passage of the CHIPS and Science Act, Gov. [Jared] Polis has placed the attraction and retention of the semiconductor industry companies at the forefront of Colorado’s economic strategy,” she said.

Suthers called the investment “tremendous news for our local economy.” 

“This facility has been in our city since 1983 [Microchip acquired it in 2016] and today’s announcement ensures it will continue contributing directly to our vitality for many, many years to come.”

Simonsic said a large part of the $880 million going into the Springs facility will support the development of silicon carbide technology for sustainability programs and electric vehicles. 

“You can’t have a true sustainability program without  silicon carbide,” Simonsic said. “You can’t have electric vehicles, electric trains, electric buses, power supplies. The heart of all sustainability programs — in terms of power and energy savings — is silicon carbide.”

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