The Biden-Harris Administration has announced a preliminary memorandum of terms (PMT) with Polar Semiconductor, in which the U.S. Department of Commerce may provide up to $120 million in federal incentives under the CHIPS and Science Act. This proposed funding is expected to spur investment from private and state sources to expand Polar's manufacturing facility and introduce new technology capabilities in Bloomington, Minnesota.
This expansion and modernization could potentially double Polar's U.S. production capacity of sensor and power chips within two years. The proposed investment would also bring in more U.S. private capital, transforming Polar from a majority foreign-owned manufacturer to a majority U.S.-owned commercial foundry, thereby expanding opportunities for U.S. chip designers to innovate and produce technologies domestically.
President Biden signed the CHIPS and Science Act into law in August 2022 with the aim of strengthening U.S. supply chains, creating good-paying jobs, and advancing U.S. competitiveness. Power and sensor chip shortages were among the most acute bottlenecks during the COVID-19 pandemic, disrupting critical industries served by Polar, including automotive, healthcare, aerospace, and defense.
"Thanks to President Biden’s leadership, with this announcement we are making taxpayer dollars go as far as possible to create jobs, secure our supply chains, and bolster manufacturing in Minnesota,” said U.S. Secretary of Commerce Gina Raimondo.
The proposed investment would also create over 160 manufacturing and construction jobs in Minnesota through Polar’s semiconductor manufacturing operations. For this project, Polar has committed to utilizing a Project Labor Agreement (PLA) to support its construction workforce.
Furthermore, Polar is committed to climate responsibility as a top priority in its operations. Recently, it transitioned its semiconductor fab operation to rely entirely on clean and renewable energy sources for its electric power needs.
"We are very pleased to announce this historic investment in Minnesota semiconductor manufacturing," said Surya Iyer, President and Chief Operating Officer of Polar Semiconductor.
Polar has received state and federal support for its proposed expansion, including $75 million from the Minnesota Department of Employment and Economic Development (DEED). The company also plans to claim the Department of the Treasury’s Investment Tax Credit, which is expected to be up to 25% of qualified capital expenditures.
The Department of Commerce has made this PMT announcement under the CHIPS and Science Act, with additional PMT announcements expected throughout 2024. CHIPS for America is part of President Biden’s economic plan to invest in America, stimulate private sector investment, create good-paying jobs, make more in the United States, and revitalize communities left behind.
