Assisting Polar Semiconductor’s expansion goals with the Minnesota plant, the US Commerce Department has sanctioned a $123 million grant to bolster the production of sensor and power chips.
On Tuesday, the U.S. Commerce Department announced its approval of a $123 million grant for Polar Semiconductor to expand its Minnesota facility. This will enable the company to nearly double its domestic production capacity for power and sensor chips.
The US Commerce Secretary Gina Raimondo highlighted that this investment would help establish a new US-owned foundry for sensor and power semiconductors, increasing Polar’s production from about 20,000 wafers per month to 40,000, catering to the aerospace, automotive, and defence sectors.
This grant is part of the Biden administration’s $52.7 billion programme to support semiconductor manufacturing and research, and it marks the first finalised award under this initiative. The funding is to be provided as Polar meets specific project milestones.
Besides, the state of Minnesota is contributing $75 million to the company’s total $525 million expansion.
In April, Polar, which is 70% owned by Sanken Electric and 30% by Allegro MicroSystems, announced that Niobrara Capital and Prysm Capital intended to invest $175 million to acquire approximately 59% of the firm.
Apart from Polar, the Commerce Department has allocated over $35 billion for 26 projects, including significant grants for companies like Samsung ($6.4 billion for Texas expansion), Intel ($8.5 billion), TSMC ($6.6 billion for U.S. production), and Micron Technology ($6.1 billion for U.S. factories).
Lael Brainard, a top economic advisor at the White House, stated on Monday that this is expected to be the first of many upcoming awards. Raimondo added that more funding announcements will be made in the coming weeks and months.
The 2022 CHIPS Act, supported by President Biden, aims to enhance the US competitiveness with China and increase domestic semiconductor production. The legislation also includes a 25% investment tax credit for constructing chip plants, estimated to provide $24 billion in benefits.
Additionally, Congress approved legislation on Monday to streamline federal permitting processes for semiconductor manufacturing projects.
