Biden-Harris Administration Announces First CHIPS Commercial Fabrication Facilities Award With Polar Semiconductor, Establishing Independent American Foundry
By Godson Umejiego, Bureau Chief, The Americas
Monday, as part of the Biden-Harris Administration’s Investing in America agenda, the US Department of Commerce announced its first award under the CHIPS Incentives Programme’s Funding Opportunity for Commercial Fabrication Facilities of up to US$123 million in direct funding to Polar Semiconductor (Polar).
Cyber Era NG learns the award follows the previously signed preliminary memorandum of terms and the completion of the Department’s due diligence. The award will expand and modernize the company’s manufacturing facility in Bloomington, Minnesota. The Department will distribute the funds based on Polar’s completion of project milestones.
“Semiconductors – those tiny chips smaller than the tip of your finger – power everything from smartphones to cars to satellites and weapons systems. I signed the CHIPS and Science Act to revitalize American leadership in semiconductors, strengthen our supply chains, protect our national security, and advance American competitiveness. And over the last three and a half years, we have done just that, catalyzing over US$400 billion in private sector investments in semiconductors and electronics that are creating over 115,000 construction and manufacturing jobs. This year alone, the United States is on pace to see more investment in electronics manufacturing construction than it did over the last 24 years combined,” said President Joe Biden. “Today’s announcement that the Department of Commerce has finalized 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. Polar’s new facility will also be completed under a Project Labour Agreement to support its construction workforce, creating good-quality union jobs in Bloomington, Minnesota. Today’s announcement is just one of the many ways our Investing in America agenda is reshoring US manufacturing, investing in workers and communities across the country, and advancing America’s leadership in the technologies of tomorrow.”
“Today represents an important milestone in the implementation of the historic CHIPS and Science Act as we announce the first award agreement with Polar,” said US Secretary of Commerce Gina Raimondo. “The Biden-Harris Administration’s investment in Polar will create a new US-owned foundry for sensor and power semiconductors and modernize and expand Polar’s facilities in Minnesota, strengthening our national and economic security, bolstering our supply chains, and creating quality jobs.”
The Biden-Harris Administration’s investment will support Polar’s efforts to almost double its US production capacity of sensor and power chips within two years. This award catalyzes a total investment of more than $525 million from private, state, and federal sources to transform Polar from a majority foreign-owned in-house manufacturer to a majority US-owned commercial foundry. Through Polar’s semiconductor manufacturing operations, the Administration’s investment is expected to create over 160 manufacturing and construction jobs in Minnesota.
“The Biden-Harris Administration’s investment into Polar marks the first award, of many to come, into communities across our nation to regain our lead in semiconductor manufacturing,” said Lael Brainard, National Economic Advisor.
“Polar and its employees are excited to embark on our transformative project. We welcome new customers and partnerships, and as a domestic US-owned sensor and advanced power semiconductor merchant foundry, we will support technology and design innovation, protect intellectual property, facilitate onshoring and technology transfers, and provide efficient low- to high-volume manufacturing with world-class quality,” said President and Chief Operating Officer of Polar Semiconductor Surya Iyer. “Through our collaborative and sustained workforce development efforts, we expect to support customers with highly skilled employees today and into the future. 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.”
The purpose of the Award Phase is to finalize comprehensive due diligence and negotiate the final award documents. As stated in the CHIPS Notice of Funding Opportunity for Commercial Fabrication Facilities, the Department will distribute direct funding based on the completion of project components in connection with both the capital expenditures for the project and production and commercial milestones. The program will track the performance of each CHIPS Incentives Award through financial and programmatic reports, in accordance with the award terms and conditions, to establish a compliance programme to monitor that commitments are being upheld.
