(Colorado Newsline) The Biden administration announced Thursday a preliminary agreement that could bring about $90 million from the bipartisan CHIPS and Sciences Act into Colorado to expand semiconductor producer Microchip Technology’s facilities in Colorado Springs. 

If the agreement is executed, Microchip would receive about $90 million — the largest award from the CHIPS and Sciences Act — to modernize the company’s Colorado Springs facility and about $72 million to expand another facility in Gresham, Oregon. Currently, the announcement is only “a non-binding preliminary memorandum of terms,” which is an early step in the process securing CHIPS and Science Act funding for a commercial fabrication facility. 

Laurie Locascio, U.S. Commerce Department undersecretary for standards and technology and director of the National Institute Standards and Technology, said the U.S. used to manufacture 40% of the world’s supply of semiconductors. Today, the U.S. only manufactures 12% of the world’s semiconductors, which are used in building technology for automotive, commercial, industrial, defense and aerospace industries. 

“CHIPS for America is a once in a generation opportunity to build a thriving domestic semiconductor industry and a resilient supply chain along with research and development to keep the U.S. at the forefront of semiconductor electronics innovation,” Locascio said at Microchip’s Colorado Springs facility.

Colorado political leaders including Democratic Gov. Jared Polis, Democratic U.S. Sen. John Hickenlooper and Republican U.S. Rep. Doug Lamborn joined Locascio for Thursday’s announcement, as well as local officials including Colorado Springs Mayor Yemi Mobolade and El Paso County Commissioner Stan VanderWerf.

Polis said the federal funding will create hundreds of good paying jobs in Colorado Springs and that he’s proud to see Colorado receive the largest award so far from the CHIPS and Science Act.

“We’re proud that the largest federal investment in the semiconductor industry to date is an investment in Colorado,” Polis said. “That’s a testament to the strength of Colorado’s economy, our collaborative work to make sure that our state is the very best to live, work and do business.”

The preliminary agreement with the Department of Commerce would allow Microchip to grow its production of microcontroller units and other semiconductors found in cars, phones, appliances, medical devices and other technologies people use daily. The modernization of Microchip’s facilities will allow the company to triple the amount of semiconductors it produces annually. 

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Microchip is pursuing a $940 million modernization and expansion of its facilities and could see product lines in Colorado Springs increase up to seven times current capacities. The company expects the project to bring 400 new jobs to El Paso County. 

“By investing in production of semiconductors here at home, we are capitalizing on the opportunity to strengthen our domestic supply chain while bolstering America’s ability to produce systems and the components we need, and our allies also need, and we rely on for our collective national and economic security,” Locascio said. 

Lamborn, who serves on the House Armed Services Committee, said Microchip is the largest supplier to the Defense Industrial Base, a worldwide system contributing to the research and development of military operations. He encouraged the Department of Commerce to move forward quickly to finalize the next steps to secure the proposed funding. 

“Providing our defense industry with a secure, reliable and domestic supply of semiconductors is even more important at a time when our adversaries — think about Russia and China and what they’re trying to do — as they continue to modernize their militaries at an alarming rate,” Lamborn said. 

The announcement adds another win for Colorado Springs months after the Biden administration decided to keep U.S. Space Command in Colorado. 

“We have had a number of record breaking economic announcements recently, but this one stands out as Colorado Springs will be one of the first places in the country to benefit from the CHIP Act’s active grant funding,” Mobolade said. “This investment will ensure Colorado Springs continues its long and proud legacy of not just being known as Olympic City USA, but also as Silicon Mountain.”

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