Commerce Department to Invest $120M in Polar Semiconductor

The Department of Commerce is planning to provide Polar Semiconductor with $120 million in funding under the CHIPS and Science Act to expand and modernize the company’s manufacturing facility in Minnesota.

The agency and the company signed a non-binding preliminary memorandum of terms for the proposed investment, which would make Polar a majority U.S.-owned commercial foundry.

With the funding, Polar would be able to increase its capacity to produce sensors and power chips over the next two years and provide more job opportunities for chip designers in the country, the Department of Commerce said.

The CHIPS and Science Act, passed into law in 2022, aims to increase the resilience of the U.S. semiconductor supply chain.

During the COVID-19 pandemic, chip shortages impacted various industries, including defense, health care and aerospace.

Using the funding worth $525 million provided through the legislation, the U.S. can strengthen its domestic chip supply chain to reduce reliance on other countries for semiconductors, boost national security and prevent product shortages, the Commerce Department said.