U.S. Awards $120 Million to Chipmaker to Expand Facility in Minnesota

Federal officials will provide up to $120 million in grants to Polar Semiconductor to help the company expand its chip manufacturing facility in Minnesota, the Biden administration announced on Monday, the latest in a string of awards meant to strengthen the U.S. supply of semiconductors.

Commerce Department officials said the grant would help Polar upgrade technology and double production capacity at its facility in Bloomington, Minn., within two years. The company produces chips that are critical for cars, defense systems and electrical grids, federal officials said.

“We are making taxpayer dollars go as far as possible while crowding in private and state investment to create jobs, secure our supply chains and bolster manufacturing in Minnesota,” said Laurie Locascio, the under secretary of commerce for standards and technology.

The funding stems from the bipartisan CHIPS and Science Act, which lawmakers passed in 2022 to ramp up the domestic production of commercial semiconductors, the tiny chips crucial for most electronics, including smartphones, computers, cars and weapons systems. The law gave the Commerce Department $39 billion to distribute to companies to incentivize the construction and expansion of new plants in the United States.

Scaling up domestic chip production is a major component of President Biden’s economic policy agenda, which largely focuses on bolstering American manufacturing and bringing back jobs that have shifted overseas. Only about 10 percent of the world’s semiconductors are produced in the United States, down from about 37 percent in 1990.

Biden administration officials have so far announced awards of more than $29 billion. Last month, the Commerce Department announced up to $6.1 billion in grants to Micron to help the chipmaker build plants in New York and Idaho. Other chipmakers — including Samsung, Taiwan Semiconductor Manufacturing Company and Intel — have received multibillion-dollar awards. GlobalFoundries, Microchip Technology and BAE Systems received the first three federal awards.