The US Department of Commerce has awarded up to $123m in direct funding to Polar Semiconductor under the CHIPS Incentives Program as part of the federal government’s efforts to boost domestic semiconductor production.
Aimed at expanding and modernising Polar Semiconductor’s manufacturing facility in Bloomington, Minnesota, the funding is set to nearly double the company’s production capacity for sensor and power chips within two years. This will enable the semiconductor company to increase its wafer production from around 20,000 per month to 40,000.
“Today’s announcement that the Department of Commerce has finalised the first commercial CHIPS Incentives award with Polar Semiconductor marks the next phase of the implementation of the CHIPS and Science Act, and demonstrates how we continue to deliver on the Investing in America agenda,” said the US president, Joe Biden. “Polar’s new facility will also be completed under a Project Labor Agreement to support its construction workforce, creating good-quality union jobs in Bloomington, Minnesota.”
Polar Semiconfuct funding boost
Polar Semiconductor’s expansion is part of a $525m investment which includes contributions from private, state, and federal sources. Through these efforts, the chip company, previously a majority foreign-owned company, will be transformed into a majority US-owned commercial foundry.
The firm, which engages in sensor, power, and high-voltage wafer production, also announced the completion of its sale to Niobrara Capital and Prysm Capital. The buyers have made an equity investment of $175m in Polar Semiconductor.
Additionally, Polar Semiconductor is set to receive incentives worth $75m from the Minnesota Department of Employment and Economic Development as part of the Minnesota Forward Fund.
The semiconductor company intends to claim the US Department of the Treasury’s investment tax credit, which is likely to be up to a quarter of qualified capital expenditures.
According to the Department of Commerce, the funds will be released as Polar Semiconductor reaches project milestones.
The latest US funding is expected to support the creation of more than 160 new jobs in Minnesota, spanning both manufacturing and construction roles.
Polar Semiconductor aims to deliver advanced semiconductor solutions to key industries in the US, including automotive, aerospace, defence, medical devices, and others.
“Through our collaborative and sustained workforce development efforts, we expect to support customers with highly skilled employees today and into the future,” said Polar Semiconductor president and chief operating officer Surya Iyer. “We are pleased to close on the significant equity investment from Niobrara Capital and Prysm Capital, and we extend our sincere thanks to our partners at the US Department of Commerce, the State of Minnesota, and the City of Bloomington for their support of the future of American semiconductor manufacturing.”
Last week, Intel qualified for up to $3.5bn in US federal grants under the US Department of Defense’s Secure Enclave programme. The funding boost is aimed at reducing dependence on foreign semiconductor manufacturers and ensuring secure technology for defence needs.
On a similar note, the US Department of Commerce signed a non-binding preliminary memorandum of terms (PMT) with HP to provide up to $50m in funding for a microfluidics semiconductor fabrication plant in Oregon.
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