WASHINGTON (CN) — A Minnesota semiconductor manufacturer is receiving $120 million in federal funds to double its U.S. production capacity.
The U.S. Department of Commerce announced Monday that it reached a preliminary agreement to provide the funding to Polar Semiconductor through the CHIPS and Science Act.
The company plans to use the money, in conjunction with private funding and $75 million from the state of Minnesota, for a $525 million expansion of its manufacturing facility in the Minneapolis suburb of Bloomington.
“If we want our country to continue leading the global economy, we must stay on the cutting edge of manufacturing,” Minnesota Senator Amy Klobuchar said in a statement. “This landmark investment in Polar Semiconductor’s Bloomington facility will be a game changer for domestic semiconductor manufacturing.”
Polar produces high-voltage semiconductors that are used in the automotive, commercial and industrial sectors. It produces about 21,000 semiconductors each month at the 310,000-square-foot facility.
The investment will support 160 manufacturing and construction jobs.
Polar's president Surya Iyer said the expanded facility will allow the company to “branch into innovative technologies to serve new customers and markets.”
Laurie Locascio, undersecretary of commerce for standards and technology, said Polar’s semiconductors play “a critical role” in the aerospace, automotive and defense sectors.
“The future of the semiconductor industry is being built right here in the United States, and Polar will be part of that innovation boom,” Locascio said.
Polar is owned 70% by Japan-based Sanken Electric and 30% by New Hampshire-based Allegro MicroSystems. As part of the agreement, Polar’s owners are selling down their stakes to U.S. private equity firms to become a majority U.S.-owned company.
Last month, New York-based Niobrara Capital and Prysm Capital announced an investment of $175 million in Polar to acquire a 59% stake in the company.
“This proposed investment in Polar will crowd in private capital, which will help make Polar a U.S.-based, independent foundry,” Commerce Secretary Gina Raimondo said in a statement. “They will be able to expand their customer base and create a stable domestic supply of critical chips, made in America’s heartland.”
The Biden administration has recently announced several other grants to support expanded semiconductor production, including $20 billion for Intel’s operations in Texas and $6.6 billion toward Taiwan-based TSMC Arizona Corp.’s project in Phoenix.
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