Department of Commerce Announces Terms for Expansion of Polar Semiconductor in Minnesota

This proposed funding would catalyze investment from private and state sources to expand Polar's manufacturing facility and introduce new technology capabilities in Bloomington, Minnesota. The expansion and modernization would enable Polar to double its U.S. production capacity of sensor and power chips within two years.

Additionally, this proposed investment would bring in more U.S. private capital, which would transform Polar from a majority foreign-owned in-house manufacturer to a majority U.S.-owned commercial foundry, expanding opportunities for U.S. chip designers to innovate and produce technologies domestically.

Shortages of power and sensor chips were among the most acute bottlenecks during the COVID-19 pandemic, disrupting critical industries served by Polar, including automotive, healthcare, aerospace, and defense. Because of the proposed investment in Polar, the U.S. will have an expanded and stable domestic supply of these essential semiconductor technologies, bolstering U.S. supply chain resilience as a result. Additionally, this investment can help strengthen our national security by securing a domestic chip supply for defense purposes.

This proposed CHIPS funding supports an investment of more than $525 million, catalyzing contributions from the company, state and local entities, and private investors. This collaborative funding approach would not have been possible without the CHIPS and Science Act.

Through Polar’s semiconductor manufacturing operations, the proposed investment would create over 160 manufacturing and construction jobs in Minnesota. For the purposes of this project, Polar and construction partner Mortenson have committed to utilizing a Project Labor Agreement (PLA) to support its construction workforce.

Polar plays a leading role in the Minnesota CHIPS Coalition Workforce Partnership, a coalition of employers, education and training providers, labor organizations and others that seeks to improve workforce development programs to ensure a stronger talent pipeline for immediate and future workforce needs. As part of this announcement, Polar has committed to expanding access to quality, affordable child care for its facility workers.

Additionally, Polar is committed to climate and environmental responsibility as a top priority in its operations. Recently, Polar transitioned its semiconductor fab operation to rely entirely on clean and renewable energy sources to fulfill its electric power needs. Polar also highly prioritizes water conservation efforts including reclamation of wastewater for manufacturing processes and water collection for irrigation.

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 has also indicated that it plans to claim the Department of the Treasury’s Investment Tax Credit, which is expected to be up to 25% of qualified capital expenditures.

As explained in its first Notice of Funding Opportunity, the Department may offer applicants a PMT on a non-binding basis after satisfactory completion of the merit review of a full application. The PMT outlines key terms for a potential CHIPS incentives award, including the amount and form of the award. The award amounts are subject to due diligence and negotiation of award documents and are conditional on the achievement of certain milestones. After the PMT is signed, the Department begins a comprehensive due diligence process on the proposed projects and continues negotiating or refining certain terms with the applicant.