The US has approved $123 million for Polar Semiconductor

The U.S. Commerce Department said Tuesday it has approved a $123 million grant for Polar Semiconductor to expand its Minnesota plant in the U.S. This will allow the company to nearly double its production capacity for power and sensor chips in the US.

The grant, part of the Biden administration's $52.7 billion plan to boost semiconductor production and research, is the first under the program completed by the department. The Department of Commerce will distribute funds based on achievement of Polar's program milestones.

Commerce Secretary Gina Raimondo said the award will help “build a new American sensor and power semiconductor foundry” and increase production from about 20,000 wafers per month to 40,000 for the aerospace, automotive and defense industries.

The state of Minnesota is contributing $75 million to Polar's $525 million expansion.

In April, Polar — which is 70% owned by Sanken Electric and 30% by Allegro Microsystems — said Neobrara Capital and Prism Capital would invest $175 million for about 59% of Polar.

The Commerce Department has allocated more than $35 billion to 26 projects, including $6.4 billion to South Korea's Samsung, $8.5 billion to Intel, $6.6 billion to Taiwanese giant TSMC and $6.1 billion to Micron to expand chip production in Texas. Technology to finance industries in America.

The Ministry shall complete due diligence before finalizing the award.

“We expect this to be the first of many awards that will be finalized soon,” White House chief economic adviser Lael Brainard said Monday.

And Raimondo added: “You'll see many more awards like this in the coming weeks and months, dollars for companies.”

The 2022 chip bill proposed by President Joe Biden aims to make the U.S. more competitive with China and dramatically expand chip manufacturing in the U.S. The Chip Bill also provides a 25% tax break to build $24 billion worth of chip factories.

Separately, Congress passed legislation on Monday that eases federal approval processes for semiconductor manufacturing projects.