The U.S. Department of Commerce announced on September 24, 2024, the first award under the CHIPS Incentives Program’s Funding Opportunity for Commercial Fabrication Facilities. The recipient, Polar Semiconductor, will receive up to $123 million in direct funding to expand and modernize its manufacturing facility in Bloomington, Minnesota. Commerce will distribute the funds based on completion of project milestones, following a previously signed preliminary memorandum of terms and completion of due diligence.
What it means
The award is intended to nearly double Polar Semiconductor’s U.S. production capacity of sensor and power chips within two years. The project also transforms Polar from a majority foreign-owned in-house manufacturer into a majority U.S.-owned commercial foundry, with an equity investment closed with Niobrara Capital and Prysm Capital. Total investment catalyzed across private, state, and federal sources exceeds $525 million. Construction and manufacturing work at the facility will be carried out under a Project Labor Agreement, and the project is expected to create over 160 manufacturing and construction jobs in Minnesota.
The CHIPS Program Office and CHIPS Research and Development Office, both housed within NIST at the Department of Commerce, administer the program. CHIPS for America has allocated more than $35 billion in proposed funding across 16 states. President Biden said the administration has catalyzed over $400 billion in private sector investments in semiconductors and electronics since taking office, creating over 115,000 construction and manufacturing jobs, and that the United States has seen more investment in electronics manufacturing construction over that period than in the prior 24 years combined. Secretary of Commerce Gina Raimondo called the Polar award “an important milestone in the implementation of the historic CHIPS and Science Act.”
Key facts
- Award: up to $123 million in direct federal funding to Polar Semiconductor
- Location: Bloomington, Minnesota
- Total investment catalyzed: more than $525 million from private, state, and federal sources (according to the Department of Commerce)
- Production goal: nearly double U.S. sensor and power chip capacity within two years (according to the company)
- Jobs: over 160 manufacturing and construction jobs expected in Minnesota
- Ownership change: Polar transitions from majority foreign-owned to majority U.S.-owned commercial foundry; equity investors are Niobrara Capital and Prysm Capital
- Construction: facility work to be completed under a Project Labor Agreement
- CHIPS for America total proposed funding: more than $35 billion across 16 states
Source: U.S. Department of Commerce / National Institute of Standards and Technology (NIST) news release