Semiconductor Factory Jobs Restored After Mass Layoffs

The pandemic and subsequent chip shortage forced the company to change course.

In late 2019, while word of a troubling new virus was just beginning to cause a worldwide stir, an Arizona semiconductor company slashed its workforce at a factory in Colorado.

Microchip Technology cut some 300 jobs at the Colorado Springs facility — the last of what was once a thriving local semiconductor industry — as part of a broader restructuring strategy. Amid long-term declines in the older chips produced at the Colorado Springs site, Microchip sought to turn it into a “boutique fab” focused on specialty chips for the military, aerospace and automotive sectors.

But circumstances beyond its control — to put it lightly — apparently prompted the company to change its plans.

Pandemic-related interruptions in global supply chains, and a surge in demand from electronics companies and automakers alike, created a persistent, problematic shortage of semiconductors worldwide — and forced manufacturers and policymakers to take a new look at producing chips in the U.S. after watching the industry move overseas for decades.

After the 2019 cuts reduced its payroll from about 800 to roughly 500, the crisis prompted Microchip to bring workers back and add new hires, officials told the Colorado Springs Gazette. The company also added new products for aerospace and electric vehicle applications.

The facility’s workforce returned to some 700 by early last year, and Wednesday, the company announced plans to invest $40 million in the plant and add another 50 to 75 jobs, which would restore it to its pre-layoff levels. The project will shift the factory from 6-inch wafers to the 8-inch variety and double its overall chip-making capacity.

The company said the moves will ensure its long-term viability in Colorado Springs, and more hires are expected in coming months. Yet another expansion, meanwhile, is also already in the works amid surging sales and profits.

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