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Polar Semiconductor to Get $120 Million Aid From US Government

Last Updated on 13th May 2024

Polar Semiconductor is set to receive a USD 120 million grant from the U.S. government. This grant is part of the Biden administration's USD 52.7 billion semiconductor manufacturing and research subsidy program. The grant will be used to expand Polar's semiconductor plant in Minnesota, which will enable the company to double its U.S. production capacity of sensor and power chips within two years. 

 

Polar Semiconductor to Get $120 Million Aid From US Government

 

The expansion and modernization of the facility will introduce new technology capabilities in Bloomington, Minnesota. The award follows an agreement by Polar's current owners to sell down their stakes to U.S. private equity firms so that the company can become majority U.S.-owned.

 

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The Commerce Department, which made the grant, noted that shortages of power and sensor chips were a key issue during the COVID-19 pandemic, disrupting many sectors. Under Secretary of Commerce Laurie Locascio stated that Polar's technology plays a critical role in high-voltage applications across the aerospace, automotive, and defense sectors. This proposed investment would enable new capabilities to manufacture the next generation of semiconductors.

 

The state of Minnesota is also contributing USD 75 million to the USD 525 million project. Polar is currently 70% owned by Sanken Electric and 30% held by Allegro MicroSystems. Last month, Sanken announced that Niobrara Capital and Prysm Capital plan to invest $175 million in around 59% of Polar. Sanken's holding will drop to around 30%, and Allegro's stake will fall to around 10%.

 

The Biden administration has announced seven other planned awards, including up to USD 6.4 billion in grants to South Korea's Samsung to expand chip production in central Texas. Intel won USD 8.5 billion in grants in March, while Taiwan's TSMC clinched USD 6.6 billion last month to build out its American production. The Commerce Department also said last month it plans to award memory chip maker Micron Technology USD 6.1 billion to help fund domestic semiconductor factory projects.

 


About Polar Semiconductors

Polar Semiconductor, formerly known as VTC and PolarFab, is a leading company specializing in high-performance, automotive-grade semiconductor manufacturing.  With over 60 years of integrated circuit and power semiconductor experience, Polar Semiconductor is more than just a manufacturing facility. The company fabricates integrated circuit (IC) and power semiconductor devices used in industrial, consumer, and automotive markets.

 


Read: South Korea Prepares Support Package Worth Over $7 billion for Semiconductor Industry


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