U.S. Secures $123 Million Grant for Polar Semiconductor: A Major Step in Boosting Domestic Chip Production
U.S. Commerce Department has finalized a $123 million grant for Polar Semiconductor

kathmandu | In a strategic move to expand domestic semiconductor production, the U.S. Commerce Department has finalized a $123 million grant for Polar Semiconductor.
The grant, part of President Joe Biden’s $52.7 billion CHIPS Act, is aimed at strengthening the country’s ability to produce critical power and sensor chips for industries ranging from aerospace to automotive.
Located in Minnesota, Polar Semiconductor will use the funds to nearly double its output, increasing production from 20,000 wafers per month to 40,000. This expansion is seen as a vital step toward reducing America’s reliance on foreign semiconductor suppliers, particularly amid ongoing global chip shortages and escalating competition with China.
But the financial backing doesn’t stop at federal support. The state of Minnesota is adding $75 million to the $525 million expansion project. In addition, private equity firms Niobrara Capital and Prysm Capital have announced a $175 million investment in Polar, acquiring a 59% stake in the company.
Despite this infusion of capital, the firm remains 70% owned by Japan's Sanken Electric, raising questions about the extent of "U.S. ownership" for this critical manufacturing facility.
Commerce Secretary Gina Raimondo has praised the deal, stating that the expansion will create a U.S.-owned foundry for sensor and power semiconductors.
However, the reality is more complex. While the plant will significantly boost U.S. chip output, the mix of foreign and private equity ownership adds layers of control that may influence future production decisions.
This marks the first award to be finalized under the CHIPS Act, and it sets the stage for many more. The Biden administration has already allocated over $35 billion across 26 projects, including major grants to Samsung, Intel, and Taiwan’s TSMC, all to be used for expanding U.S. semiconductor production.
But the pace of these awards has been slow, with delays attributed to the complex due diligence process.
The CHIPS Act, passed in 2022, is more than just a funding program. It includes a 25% investment tax credit for companies building chip plants in the U.S., a key incentive worth an estimated $24 billion.
The broader goal is clear: to reinvigorate American chipmaking in a landscape where China’s influence looms large.
Yet, questions remain. How will the U.S. balance foreign investment and national security in such a critical sector? And as Polar Semiconductor becomes the latest company to benefit from these federal funds, will the long-term control of these vital manufacturing assets remain in U.S. hands, or drift abroad? These are the concerns that many are watching closely as the semiconductor race heats up.