Biden Administration Finalizes $123M Grant for Polar Semiconductor Expansion

The U.S. Commerce Department has finalized a $123 million grant for Polar Semiconductor to expand its Minnesota plant. This will nearly double the company’s production capacity for power and sensor chips. The expansion is part of Biden’s $52.7 billion semiconductor subsidy program aimed at boosting U.S. chip production.

The U.S. Commerce Department announced Tuesday it had finalized a $123 million grant for Polar Semiconductor to expand its production plant in Minnesota. This expansion will allow Polar to nearly double its U.S. production capacity of power and sensor chips.

The grant, part of the Biden administration's $52.7 billion semiconductor manufacturing and research subsidy program, is the first to be finalized. Funds will be distributed based on Polar's completion of project milestones. Commerce Secretary Gina Raimondo said the move would aid in creating a new U.S.-owned foundry for semiconductors, boosting Polar's output to 40,000 wafers per month.

The state of Minnesota is contributing $75 million to the $525 million expansion project. Polar, predominantly owned by Sanken Electric and Allegro MicroSystems, received commitments for additional investments from Niobrara Capital and Prysm Capital. The Commerce Department has allocated substantial funds to other semiconductor projects, indicating a broader federal push to enhance U.S. competitiveness in the chip industry.

(With inputs from agencies.)