In an abrupt turnaround from enthusiastic hiring announcements a year ago, semiconductor manufacturer Microchip has announced the layoffs of 238 employees from its Colorado Springs facility.
Tuesday’s layoff announcement filed with the state labor department came a day after Microchip outlined a company-wide reduction of roughly 2,000 people. A long list of reasons for the restructuring includes changes in interest rates and inflation, geopolitical uncertainty like the ongoing war between Ukraine and Russia, the potential of tariff impacts and the possible revocation of CHIPS and Science Act funds by the Trump administration.
Back in January 2024, Microchip was flying high. A $90 million infusion to the Colorado Springs facility from the CHIPS Act was considered the single biggest investment from the legislation at that time. That funding, as with other CHIPS Act projects, was intended to boost domestic production of vitally important semiconductor chips. The money was expected to add more than 350 jobs at the Springs location.
“Everything that we live with today comes back to these chips,” said Democratic Sen. John Hickenlooper during a press conference at the time. “Making sure that we can onshore them…moves us forward in what is continuing to be a global competition.”
In his Tuesday address to Congress, President Donald Trump advocated for repealing the CHIPS Act, arguing the implementation of tariffs would better achieve the legislation’s goal.
“We don’t have to give them money,” Trump said in the speech. “They will come because they won’t have to pay tariffs if they build in America.”
The president supported his claim with the example of Taiwan Semiconductor, which has recently announced it will spend $165 billion to increase chip manufacturing in Arizona. However, a small portion of the company’s initial investment last year — $6.6 billion — did come from the CHIPS Act.
Other Microchip locations besides Colorado Springs are also feeling the pinch. Layoffs are also occurring in Oregon and the Philippines, and a facility in Arizona is closing earlier than expected.
