The Biden administration has announced a grant of up to $120 million to Polar Semiconductor to facilitate the expansion of its chip manufacturing facility in Minnesota. This move is part of a broader initiative to reinforce the semiconductor supply chain in the United States.
According to Commerce Department officials, the grant will enable Polar to upgrade its technology and double its production capacity in Bloomington, Minnesota, within two years.
Polar specializes in manufacturing chips crucial for various sectors such as automotive, defense, and energy infrastructure.
Laurie Locascio, the under-secretary of commerce for standards and technology, emphasized the government’s strategy of maximizing the impact of taxpayer dollars while leveraging private and state investment to foster job creation and fortify manufacturing in Minnesota.
The funding originates from the bipartisan CHIPS and Science Act, enacted in 2022 to bolster domestic semiconductor production.
This legislation allocated $39 billion to the Commerce Department to incentivize the construction and expansion of semiconductor plants within the country.
President Biden’s economic agenda prioritizes revitalizing American manufacturing and reinstating jobs that have moved overseas.
Currently, only a small fraction of the world’s semiconductors are manufactured in the United States, a significant decline from previous decades.
To address this issue, the Biden administration has allocated over $29 billion in grants to various semiconductor companies.
Recent beneficiaries include Micron, which received up to $6.1 billion to establish plants in New York and Idaho, along with other major players like Samsung, Taiwan Semiconductor Manufacturing Company, and Intel.
The objective of ramping up domestic semiconductor production is to mitigate the risk of chip shortages, as witnessed during the COVID-19 pandemic. Federal officials underscored that Polar’s grant will contribute to averting such disruptions in the future.
Polar, like other grant recipients, must fulfill specific milestones to access the funds. Additionally, the company intends to utilize federal tax credits to offset the expenses associated with constructing and equipping its factories.
Minnesota is also supporting Polar’s expansion project with approximately $75 million in grants as part of a total project cost exceeding $525 million. This initiative is projected to create over 160 manufacturing and construction jobs in the state.
Moreover, the federal grant will enable Polar to establish itself as a U.S.-owned independent foundry, broadening its customer base. Foundry services involve manufacturing chips designed and marketed by other companies.
Surya Iyer, the president and chief operating officer of Polar, emphasized the critical importance of the grant for the company’s expansion ambitions. He highlighted that without this financial support, such a substantial project would not be feasible.
