Biden-Harris Administration Announces Preliminary Terms with Akash Systems to Support Development and Production of Emerging Semiconductor Technology

Media Contact: Maddy Broas, madeline.broas [at] chips.gov (madeline[dot]broas[at]chips[dot]gov)

Today, the Biden-Harris Administration announced that the Department of Commerce and Akash Systems have signed a non-binding preliminary memorandum of terms (PMT) to provide up to $18.2 million in proposed direct funding under the CHIPS and Science Act. President Biden signed the bipartisan CHIPS and Science Act to usher in a new era of semiconductor manufacturing in the United States and advance U.S. economic and national security. The proposed investment would support the construction of a 40,000 square foot cleanroom space within an existing building to transform it into a facility for semiconductor manufacturing. This proposed CHIPS funding, together with funding from Akash, venture capital firms, and other private investors, would support a $121 million investment and enable the company to leverage its intellectual property and experience of developing semiconductor technologies that serve important end markets, such as communications and the defense industrial base, while also creating over 400 direct manufacturing and construction jobs.

“A critical part of the success of CHIPS for America is ensuring the United States is a global leader in every part of the semiconductor supply chain,” said U.S. Secretary of Commerce Gina Raimondo. “Through this proposed investment in Akash, we are taking a critical step forward to fulfill that mission. With the support of this proposed funding, the Biden-Harris Administration is helping to accelerate innovation, advance U.S. technology leadership in semiconductor manufacturing, and spur good-paying jobs and increased economic opportunities.” 

Through this proposed investment, the Biden-Harris Administration would help Akash construct a semiconductor manufacturing facility in West Oakland, California, to manufacture various Diamond Cooling substrates, devices, and systems at scale. Rooted in Akash’s unique expertise in integrating synthetic diamond substrates with compound semiconductor materials like Gallium Nitride, the company utilizes its Diamond Cooling technology to improve thermal performance of semiconductors that need to maintain high-performance capabilities in challenging environments. This emerging technology, pioneered by Akash, is shown to improve heat dissipation of semiconductor devices, which strengthens performance and reliability in microelectronic systems. Akash is also utilizing its diamond materials expertise to launch innovative GPU-cooling technologies to improve thermal management with AI-focused data centers.

“Today’s investment supports the build out and scale up of innovative semiconductor manufacturing technologies of the future here in America while utilizing a project labor agreement and strong labor provisions,” said National Economic Advisor Lael Brainard.

“This proposed funding is an important milestone for Akash Systems and for innovative US technology,” said Felix Ejeckam, Akash Systems co-founder and CEO. “As a U.S. company developing next-generation semiconductor technology, this validates our vision and strategy, helping us to deliver cutting-edge solutions that address thermal challenges in today’s high-performance compute and communication systems. We’re excited to drive this advancement forward for the industry and for the future of American technology.”

For the purposes of construction for this project, Akash will operate under a project labor agreement (PLA) with the Alameda Building Trades and is emphasizing targeted hiring for West Oakland residents. To support the company’s facility workforce development efforts, Akash will create good jobs with the free and fair choice to join a union and will collaborate with partners, including IUE-CWA, to recruit, train, and hire workers through activities such as recruiting from underserved and economically disadvantaged populations, collaborating on curriculum, and developing a pre-hire training program. Additionally, the company will support its workforce development through its ongoing partnerships with Berkeley City College, Laney College, and Northeastern University Oakland Campus.

The company has indicated that it plans to claim the Department of the Treasury’s Advanced Manufacturing Investment Credit (CHIPS ITC), which is 25% of qualified capital expenditures. Click here to learn more about the tax credit.

As explained in its first Notice of Funding Opportunity, the Department of Commerce may offer applicants a PMT on a non-binding basis after satisfactory completion of the merit review of a full application. The non-binding PMT outlines key terms for a potential CHIPS incentives award, including the amount and form of the award. The proposed award amounts are subject to due diligence and negotiation of award documents and are conditional on the achievement of certain milestones. After a non-binding PMT is signed, the Department of Commerce begins a comprehensive due diligence process on the proposed projects and continues negotiating or refining certain terms with the applicant. The terms contained in any final award documents may differ from the terms of Akash’s non-binding PMT being announced today

About CHIPS for America
CHIPS for America has allocated over $36 billion in proposed funding across 20 states and proposed to invest billions more in research and innovation, which is expected to create over 125,000 jobs. Since the beginning of the Biden-Harris Administration, semiconductor and electronics companies have announced over $400 billion in private investments, catalyzed in large part by public investment. CHIPS for America is part of President Biden and Vice President Harris’s economic plan to invest in America, stimulate private sector investment, create good-paying jobs, make more in the United States, and revitalize communities left behind. CHIPS for America includes the CHIPS Program Office, responsible for manufacturing incentives, and the CHIPS Research and Development Office, responsible for R&D programs, that both sit within the National Institute of Standards and Technology (NIST) at the Department of Commerce. Visit https://www.chips.gov to learn more.