Feds Allocate Up to $120M for Bloomington Chipmaker
A Minnesota chipmaker stands to take in up to $120 million in federal funds.
On Monday, the U.S. Department of Commerce announced that it reached a preliminary agreement to disburse the funds to Bloomington-based Polar Semiconductor. The funding comes with strings attached: Per a Monday news release from the commerce department, “the award amounts are subject to due diligence and negotiation of award documents and are conditional on the achievement of certain milestones.”
If all goes to plan, Polar aims to use the funds on a wider $525 million facility expansion project that would double the company’s current production capacity. In a separate release issued by the company, Polar officials said the project would enable the facility boost production from about 20,000 semiconductor wafers per month to nearly 40,000 wafers per month. The company noted that the expansion would also create more than 160 local jobs. Polar currently employs about 535 people.
Officials noted that the expansion project would also be supported by incentives from the state of Minnesota.
Polar Semiconductor president and chief operating officer Surya Iyer said the federal dollars will enable the company to “branch into innovative technologies to serve new customers and markets.”
Separately, Iyer noted that the company is also receiving a “significant equity investment” from Niobrara Capital and Prysm Capital, a pair of private equity firms based on the East Coast. That investment will “allow the company to be U.S.-owned,” Iyer added. Today, Polar is jointly owned by Japan-based Sanken Electric Co. Ltd. and New Hampshire-based Allegro MicroSystems, Inc. The latter two companies will maintain their investments in Polar, though they’ll shift to minority owners.
The federal dollars, meanwhile, originate from the CHIPS and Science Act, a 2022 law aimed at ramping up domestic production of semiconductors. The law had a few other financial incentives designed to boost American competitiveness worldwide, including the national “Tech Hubs” competition that could bring millions of dollars to Minnesota’s medtech industry.
Today, just about 10% of the world’s supply of semiconductors come from the United States, The New York Times reported early Monday. That’s notably down from 37% back in 1990, according to the paper.
In a statement, U.S. Sen. Amy Klobuchar said the federal government’s investment in Polar Semiconductor will be a “game changer for domestic semiconductor manufacturing.”
“If we want our country to continue leading the global economy, we must stay on the cutting edge of manufacturing,” Klobuchar said.
