Continuing a string of recent CHIPS and Science Act direct funding, the U.S. Department of Commerce (DoC) will invest $120 million in Polar Semiconductor to transform the company into a U.S.-based semiconductor foundry.
The investment would include private and state sources to expand Polar’s manufacturing facility and introduce new capabilities and technology in Bloomington, Minnesota. Additionally, this would transform the company from a majority foreign-owned in-house manufacturer to a U.S.-owned commercial semiconductor foundry.
The expansion in the facility will help to double Polar’s sensor capacity and power chips in the next two years, the DoC said. It will also open new opportunities for chip designers to produce technologies domestically.
Polar Semiconductor is the eight company to be awarded direct funding since the CHIPS Act was signed into law in August 2022 by President Joe Biden. Other companies that have been awarded funding include:
- Intel — $8.5 billion
- TSMC — $6.6 billion
- GlobalFoundries — $1.5 billion
- Samsung — $6.4 billion
- Micron Technology — $6.14 billion
- BAE Systems — $35 million
- Microchip Technology — $162 million
Why it matters
Power and sensors were hit hard by the semiconductor shortage that took place in 2020 when the COVID-19 pandemic caused lockdowns across the Asian chip manufacturing supply chain. Polar’s devices are served in critical industries like automotive, healthcare, aerospace and defense.
As a result, it became clear that the aggregation of the semiconductor manufacturing sector in Asia posed a risk to the global supply chain and the hope is that by expanding regional manufacturing, it would dampen the blow if another pandemic or geopolitical event happens in one region.
Expanding Polar’s chip manufacturing for sensors and power devices will help to boost the supply chain resilience and secure the domestic chip supply for defense purposes, the DoC said.
The goal of the CHIPS Act is to bolster domestic U.S. semiconductor manufacturing. Converting a foreign-owned foundry to a domestic-owned foundry that works with companies in the U.S. is a big move toward diversifying the chip supply chain and securing America’s national security.
The good news is that the act is purportedly doing its job as the Semiconductor Industry Association (SIA) forecasts domestic semiconductor manufacturing capacity will grow a whopping 203% over the next decade, which will be the largest increase in the world during this time.
This will result in America projected to capture 28% of total global capital expenditures from 2024 to 2032, only second to Taiwan at 31%. Additionally, the U.S. share of advanced logic manufacturing will grow to 28% up from virtually 0% in 2022, the SIA forecasts.
The CHIPS Act is also funding future R&D efforts for semiconductors as well as advanced packaging opportunities and other projects — like $285 million for digital twin for the semiconductor industry.
