October 8, 2024 /SemiMedia/ — Polar Semiconductor has secured $123 million in funding under the U.S. CHIPS Act to expand its facility in Minnesota, aiming to double its monthly wafer production capacity from 20,000 to 40,000. The expansion will help meet growing demand for power and sensor chips in the aerospace, automotive, and defense sectors.

Announced by the U.S. Department of Commerce, the funding is the first binding award under the CHIPS Act, which will support the construction of a new U.S.-owned wafer foundry in Bloomington, Minnesota. Polar plans to invest a total of $525 million in the project, with construction expected to start in 2024 and finish by 2025.

Polar Semiconductor, a joint venture between Allegro Microsystems and Sanken Electric, specializes in sensors, power, and high-voltage wafers. It is one of Allegro’s key suppliers of 200mm wafers. U.S. Commerce Secretary Gina Raimondo said the expansion will enhance national security, strengthen supply chains, and create new jobs.

White House economic advisor Lael Brainard said the award is the first of many expected under the CHIPS Act, aimed at restoring the U.S. as a global leader in semiconductor manufacturing.

The CHIPS Act is designed to bolster U.S. competitiveness in the semiconductor industry, with approximately $52 billion in government subsidies allocated for research, development, and production. To date, the Department of Commerce has allocated over $35 billion to 26 projects, including grants for Samsung, Intel, TSMC, and Micron to expand U.S. production.