US Chip Cash Unlocked by Polar Semi Sale

The US Department of Commerce has allocated a substantial $123 million investment to Polar Semiconductor, a company based in Bloomington, Minnesota. This funding aims to double the company's sovereign foundry capacity for power and sensor chips. In addition to the government funding, private, state, and federal sources have pledged an additional $525 million to support Polar Semiconductor's expansion plans. The goal is to increase the company's capacity to 40,000 wafers per month within the next two years.

This significant investment represents the first award granted under the CHIPS Incentives Program's Funding Opportunity for Commercial Fabrication Facilities program. Initially announced in May, the program required a change in ownership structure, with US private equity firms Niobrara Capital and Prysm Capital recently completing the acquisition of Polar Semiconductor for $175 million. This move paved the way for the company to receive the much-needed funding for its expansion.

President Joe Biden highlighted the importance of semiconductor technology, emphasizing its role in powering various devices, from smartphones to satellites. He underscored the significance of the CHIPS and Science Act in revitalizing American leadership in the semiconductor industry, strengthening supply chains, and enhancing national security. The Act has already catalyzed over $400 billion in private sector investments, leading to the creation of more than 115,000 jobs in construction and manufacturing.

US Secretary of Commerce Gina Raimondo expressed enthusiasm about the partnership with Polar Semiconductor, describing it as a crucial step in implementing the CHIPS and Science Act. The investment in Polar will establish a new US-owned foundry specializing in sensor and power semiconductors, contributing to national security and economic stability. The expansion and modernization of Polar's facilities in Minnesota are expected to create high-quality jobs and bolster domestic manufacturing capabilities.

Surya Iyer, President and COO of Polar Semiconductor, shared his excitement about the transformative project, emphasizing the company's commitment to innovation, intellectual property protection, and efficient manufacturing processes. With a focus on technology and design innovation, Polar Semiconductor aims to support onshoring initiatives and technology transfers while maintaining world-class quality standards. The company's collaboration with government partners and equity investors reflects a shared vision for the future of American semiconductor manufacturing.