US Completes $123M Chip Award to Polar Semiconductor By Reuters

By David Shepardson

WASHINGTON (Reuters) – The U.S. Commerce Department said on Tuesday it had finalized a $123 million grant for Polar Semiconductor to expand its Minnesota factory, which would allow the company to nearly double its manufacturing capacity of US power and sensor chips.

The award, part of the Biden administration’s $52.7 billion semiconductor research and manufacturing grant program, is the first in the program to be completed by the department. The trade will distribute funds based on Polar’s completion of project milestones.

Commerce Secretary Gina Raimondo said the award will help “create a new US-owned foundry for sensors and power semiconductors” and increase Polar’s production from about 20,000 wafers per month to 40,000, which serve aerospace needs, automotive and defense.

The state of Minnesota is contributing $75 million to Polar’s $525 million expansion.

In April, Polar — 70 percent owned by Sanken Electric and 30 percent owned by Allegro MicroSystems — said Niobrara Capital and Prysm Capital planned to invest $175 million for about 59 percent of Polar.

Commerce has committed more than $35 billion to 26 projects, including $6.4 billion in grants to South Korea’s Samsung ( KS: ) to expand chip production in Texas, $8.5 billion to Intel (NASDAQ: ), $6.6 billion for Taiwan’s TSMC to build its U.S. manufacturing. and $6.1 billion for Micron Technology (NASDAQ: ) to finance U.S. factories.

The department must conduct due diligence before it can finalize awards.

“We expect this to be the first of many awards that will be finalized soon,” White House chief economic adviser Lael Brainard said Monday.

Raimondo added, “You’re going to start seeing more awards like this, dollars for companies in the coming weeks and months.”

The Token Act of 2022 championed by President Joe Biden aims to boost efforts to make the US more competitive with China and dramatically expand US token production. The chip law also includes a 25 percent investment tax credit for building chip factories, estimated at $24 billion.

Separately, Congress on Monday gave final approval to legislation that will streamline federal permitting processes for semiconductor manufacturing projects.