November 15, 2024 /SemiMedia/ — The U.S. Department of Commerce has approved a subsidy of up to $18.2 million for California-based Akash Systems to support the construction of a 40,000-square-foot cleanroom for advanced semiconductor manufacturing in West Oakland. The funding, part of the $52.7 billion CHIPS Act for semiconductor manufacturing and research, will be combined with investments from Akash, venture capital firms, and private investors, totaling a $121 million project aimed at scaling the production of diamond thermal management substrates and devices.

Akash Systems, known for its "diamond thermal" technology, aims to enhance thermal management in AI-focused data centers. "This funding validates our vision of developing next-generation semiconductor solutions to address the thermal challenges in high-performance computing (HPC) and communication systems," said Akash CEO Felix Ejeckam.

In November 2023, Akash Systems and the IUE-CWA union signed a labor agreement covering construction and production workers, including the first neutrality agreement in the semiconductor industry for West Oakland workers, ensuring fair labor practices.

Commerce Secretary Gina Raimondo stated that the subsidy for Akash will help maintain the U.S.'s global leadership across every segment of the semiconductor supply chain. The Commerce Department has so far signed preliminary agreements worth about $36 billion under the bipartisan 2022 CHIPS Act, which aims to attract chipmakers back to the U.S. and boost domestic production.

To date, the only finalized project is Polar Semiconductor’s $123 million expansion and modernization of its chip facility in Bloomington, Minnesota. Polar has agreed to refrain from stock buybacks for five years and entered an agreement to share excess profits with the government as a condition of the funding.

The Commerce Department is working to finalize major awards ahead of the inauguration of President-elect Donald Trump in January 2025. Reports suggest that TSMC, GlobalFoundries, and at least one other chipmaker are close to securing final subsidies from the Biden administration.