The U.S. Department of Commerce awarded Polar Semiconductor (Polar) up to $123 million in total direct funding under the CHIPS and Science Act to expand and modernize the company’s manufacturing facility in Bloomington, Minnesota, which is expected to almost double its U.S. production capacity of sensor and power chips within two years. The CHIPS incentive award catalyzes an 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 U.S.-owned commercial foundry, expanding opportunities for U.S. chip designers to innovate and produce technologies domestically. Through Polar’s semiconductor manufacturing operations, the investment is expected to create over 160 manufacturing and construction jobs in Minnesota.
Shortages of power and sensor chips were among the most acute bottlenecks during the COVID-19 pandemic, disrupting critical industries, including automotive, healthcare, aerospace, and defense. Because of the Biden-Harris Administration’s investment in Polar, the U.S. is expected to have an expanded and more stable domestic supply of these essential semiconductor technologies, bolstering U.S. supply chain resilience as a result.
The CHIPS investment is also catalyzing U.S. private capital to transition Polar from a majority foreign-owned, in-house semiconductor manufacturer to a majority U.S.-owned, commercial foundry, enabling the company to expand its U.S. customer base. The collaborative funding approach involving the company, private investors, state and local entities, and federal support would not have been possible without the CHIPS and Science Act. This approach will help protect intellectual property (IP) developed at Polar and encourage innovation among U.S. fabless power semiconductor companies. Moreover, establishing commercial foundry capacity for sensor and power semiconductor technologies in the U.S. will help enable the U.S. defense industrial base to securely manufacture chips used in mission critical programs.
As a result of Biden-Harris Administration’s investment, Polar is expected to almost double its U.S. production capacity of sensor and power semiconductors within two years, from roughly 20,000 to roughly 40,000 wafer starts per month. The investment will also support the addition of advanced technologies for high performing compound semiconductors, cutting-edge sensors, and backend processing that will help the company manufacture the next generation of semiconductors.
Through Polar’s semiconductor manufacturing operations, the Biden-Harris Administration’s investment will create over 160 manufacturing and construction jobs in Minnesota. To recruit, train, and retain the workforce needed for these projects, Polar will implement a robust workforce strategy informed by the Biden-Harris Administration’s Good Jobs Principles and will receive up to $3 million in dedicated CHIPS funding to advance workforce development initiatives.
To advance its manufacturing workforce efforts:
To advance its construction workforce efforts:
Polar will make additional broad-based community investments of nearly $500,000 to promote infrastructure, transportation and mobility access, health care, and entry-level relocation expenses. Polar has also committed to undertake efforts to increase its procurement of goods and services from small, minority-owned, veteran-owned, and women-owned businesses.
In connection with the CHIPS award, the Department is requiring Polar to commit to the following environmental responsibility and worker safety measures in its operations. As is required for all CHIPS projects, Polar’s project will comply with all applicable environmental laws, including the Clean Water Act, Clean Air Act, Endangered Species Protection Act, and the Resource Conservation and Recovery Act.
In connection with the CHIPS award and the NEPA review of the proposed project, Polar is making the following environmental commitments:
Polar is also committing to the following worker safety measures:
Polar will report regularly to the Department on its implementation of these environmental and worker safety commitments.
As stated in the CHIPS Notice of Funding Opportunity (NOFO) for Commercial Fabrication Facilities, CHIPS for America will distribute direct funding based on the completion of project components in connection with both the capital expenditures for the project and construction, 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 program to monitor that commitments are being upheld. All CHIPS funding recipients are required to adhere to restrictions pursuant to the CHIPS and Science Act and NOFO regarding stock buybacks, National Security Guardrails, and access to intellectual property. Although Polar is below the $150 million threshold for the upside sharing requirement, the company has committed to an upside sharing agreement under this award. The Department and Polar have also agreed that the company will not engage in any stock buybacks for a period of 5 years.
Polar has committed to use commercially reasonable efforts to allocate 7% of its total U.S.-based revenue each year to R&D that is conducted in the United States for a period of 5 years and will support R&D and other technology advancement efforts through the National Semiconductor Technology Center (NSTC) and the Department of Defense’s Microelectronic Commons program.
Project Statistics: Polar Semiconductor | ||
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Project Summary | Recipient | Polar Semiconductor |
Location(s) | Bloomington, Minnesota | |
Congressional District | 3rd Congressional District | |
Estimated Job Creation | 98 manufacturing jobs and 68 construction jobs | |
Financial Summary | Program | CHIPS Program Office |
Direct Funding Amount | Up to $123 million | |
Total Project Cost | $525 million | |
Facility Summary | Project Type | Expansion and modernization of Polar’s existing mature-node facility |
Project Timeline | Expected to almost double U.S. production capacity within 2 years |