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Polar Semiconductor announced that the company has completed its sale to Niobrara Capital and Prysm Capital. The $175 Million in equity financing has been closed to convert Polar to a U.S.-owned merchant foundry and fund expansion of its Bloomington, Minnesota manufacturing facility. In total, Polar expects to invest approximately $525 Million in the expansion of the facility over the next two years and branch into innovative technologies to serve new customers and markets.
Polar has signed Award Documents with the U.S. Department of Commerce, under which it will receive up to $123 Million in direct funding as part of the U.S. CHIPS and Science Act, and with the Minnesota Department of Employment and Economic Development (DEED), under which it will receive $75 Million in incentives as part of the Minnesota Forward Fund. Polar is the first award recipient under the CHIPS Incentives Program’s Funding Opportunity for Commercial Fabrication Facilities and the Minnesota Forward Fund. Polar plans to claim the Department of the Treasury’s Investment Tax Credit, which is expected to be up to 25% of qualified capital expenditures.
Through these investments, Polar plans to:
- Double production capacity, ramping up from approximately 20,000 wafers per month to nearly 40,000 wafers per month,
- Upgrade and modernize its facility to become globally competitive through economies of scale,
- Deliver cutting-edge semiconductor solutions to the U.S. automotive, aerospace, defense, optoelectronics, MEMS, and medical device industries, and
- Create 160+ new jobs, strengthening Polar’s commitment to its community and driving economic growth in the State.
“Semiconductors – those tiny chips smaller than the tip of your finger – power everything from smartphones to cars to satellites and weapons systems. I signed the CHIPS and Science Act to revitalize American leadership in semiconductors, strengthen our supply chains, protect our national security, and advance American competitiveness. And over the last three and a half years, we have done just that, catalyzing over $400 billion in private sector investments in semiconductors and electronics that are creating over 115,000 construction and manufacturing jobs. This year alone, the United States is on pace to see more investment in electronics manufacturing construction than it did over the last 24 years combined,” said President Joe Biden.
“Today’s announcement that the Department of Commerce has finalized the first commercial CHIPS Incentives award with Polar Semiconductor marks the next phase of the implementation of the CHIPS and Science Act and demonstrates how we continue to deliver on the Investing in America agenda. Polar’s new facility will also be completed under a Project Labor Agreement to support its construction workforce, creating good-quality union jobs in Bloomington, Minnesota. Today’s announcement is just one of the many ways our Investing in America agenda is reshoring U.S. manufacturing, investing in workers and communities across the country, and advancing America’s leadership in the technologies of tomorrow.”
“Today represents an important milestone in the implementation of the historic CHIPS and Science Act as we announce the first award agreement with Polar,” said U.S. Secretary of Commerce Gina Raimondo. “The Biden-Harris Administration’s investment in Polar will create a new U.S.-owned foundry for sensor and power semiconductors and modernize and expand Polar’s facilities in Minnesota, strengthening our national and economic security, bolstering our supply chains, and creating quality jobs.”
“America must stay on the cutting edge of manufacturing to maintain our economic edge on the world stage. This landmark federal investment in Polar Semiconductor’s Bloomington facility is a major step toward strengthening domestic production of advanced semiconductors,” said Senator Amy Klobuchar. “I worked closely with Polar Semiconductor to secure this grant and ensure Minnesota continues to be a premier destination for business investment.”
“Minnesota is lucky to be home to businesses like Polar that consistently produce innovative, high-quality products with a global reach,” said Governor Tim Walz. “With partnerships like this, we can lead the nation in creating high-growth, high-demand, good-paying jobs.”
Surya Iyer, President and COO of Polar Semiconductor said, “Polar and its employees are excited to embark on our transformative project. We welcome new customers and partnerships, and as a domestic U.S.-owned sensor and advanced power semiconductor merchant foundry, we will support technology and design innovation, protect intellectual property, facilitate onshoring and technology transfers, and provide efficient low- to high-volume manufacturing with world-class quality. Through our collaborative and sustained workforce development efforts, we expect to support customers with highly skilled employees today and into the future. We are pleased to close on the significant equity investment from Niobrara Capital and Prysm Capital, and we extend our sincere thanks to our partners at the U.S. Department of Commerce, the State of Minnesota, and the City of Bloomington for their support of the future of American semiconductor manufacturing.”
Chip Schorr, Founder and Managing Partner of Niobrara Capital, said, “Polar is positioned to enable many of America’s most critical industries, such as aerospace and defense, automotive and medical, to have a dedicated, high performance, low cost, onshore source of power semiconductors and sensors. We are pleased to be partnering with the company to support its growth and the growth of U.S. technology manufacturing leadership.”
Jay Park, Co-Founder and Managing Partner of Prysm Capital, said “The public and private investment in Polar is a testament to the strength of Polar’s offering and team and a significant event for onshore technology investment in America. We are already seeing robust demand for Polar’s planned capacity that exceeds our expectations and reinforces our confidence in Polar.”
Polar Semiconductor leads the Minnesota CHIPS Coalition, which is composed of more than 70 organizations, including manufacturers, supply-chain partners, education and training providers, labor organizations, and state and local governments. The coalition is determined to reinvigorate the region’s legacy in technology and establish the Midwest’s semiconductor industry as a national leader.
Polar also leads the Minnesota CHIPS Coalition Workforce Partnership, collaborating with semiconductor companies, educational institutions, training organizations, the Governor’s Workforce Development Board (GWDB), and DEED. The goal is to develop a next-generation high-tech manufacturing workforce through training, upskilling, and apprenticeships. These efforts are supported by state investments and a $3 Million dedicated portion of the CHIPS award. The partnership will also draw on national programs, like Indiana’s DoD-backed SCALE initiative, to enhance local efforts.
Original – Polar Semiconductor
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Polar Semiconductor, the only U.S.-based manufacturer specializing in sensor, power, and high-voltage semiconductors, announced plans to expand its Bloomington, Minnesota manufacturing facility and branch into innovative technologies to serve new customers and markets. Polar expects to invest approximately $525 million in the expansion of the facility over the next two years, subject to receipt of appropriate approvals and federal, state, and local incentives.
Polar has signed a non-binding preliminary memorandum of terms with the Department of Commerce, under which it would receive $120 million in proposed direct funding as part of the U.S. CHIPS and Science Act, and a $75 million investment from the State of Minnesota. In addition, Polar has entered into a definitive agreement pursuant to which Niobrara Capital and Prysm Capital are leading an equity investment of $175 million, enabling Polar to transition to a U.S.-owned merchant foundry. Polar plans to claim the Department of the Treasury’s Investment Tax Credit, which is expected to be up to 25% of qualified capital expenditures.
Through these investments, Polar expects to:
- Double its current U.S. production capacity of 200mm semiconductor wafers, increasing production from approximately 20,000 wafers per month to nearly 40,000 wafers per month;
- Expand and modernize its facility with new automation and AI capabilities to become globally competitive through economies of scale;
- Better serve customers in automotive, aerospace and defense, optoelectronics, MEMS, and medical devices in the U.S. with cutting-edge semiconductor products; and
- Create over 160 new jobs to further strengthen Polar’s support of its community.
Surya Iyer, President and COO of Polar Semiconductor, said, “We are very pleased to announce this historic investment in Minnesota semiconductor manufacturing. Our expanded manufacturing facility will allow us to increase capacity and branch into innovative technologies to serve new customers and markets. Polar and its employees are grateful to the U.S. Department of Commerce and the State of Minnesota for their commitment to the future of American semiconductor manufacturing and appreciate the strong collaboration with the CHIPS Program Office, Minnesota Department of Employment and Economic Development (“DEED”), and the City of Bloomington, Minnesota, throughout this process. Polar is also pleased to welcome a significant equity investment from Niobrara Capital and Prysm Capital, which will allow the Company to become U.S.-owned, and for the continued support of our long-term partners, Sanken Electric and Allegro MicroSystems.”
Chip Schorr, Founder and Managing Partner of Niobrara Capital, said, “Polar is positioned to enable many of America’s most critical industries, such as aerospace and defense, automotive and medical, to have a dedicated, high performance, low cost, onshore source of power semiconductors and sensors. We are pleased to be partnering with the company to support its growth and the growth of U.S. technology manufacturing leadership.”
Jay Park, Co-Founder and Managing Partner of Prysm Capital, said “The public and private investment in Polar is a testament to the strength of Polar’s offering and team and a significant event for onshore technology investment in America. We are already seeing robust demand for Polar’s planned capacity that exceeds our expectations and reinforces our confidence in Polar.”
“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. “This proposed investment in Polar will crowd in private capital, which will help make Polar a U.S.-based, independent foundry. They will be able to expand their customer base and create a stable domestic supply of critical chips, made in America’s heartland.”
“When President Biden signed the CHIPS and Science Act, he put a stake in the ground about the importance of semiconductor manufacturing in the United States,” said Assistant to the President for Science and Technology and Director of the White House Office of Science and Technology Policy Arati Prabhakar. “This is where the President’s leadership changes communities and changes lives. This proposed federal investment will catalyze $525 million from private companies and the state of Minnesota to create a healthy supply of made-in-Minnesota semiconductors that are essential to producing cars, electrical grids, defense systems, and more.”
“The future of the semiconductor industry is being built right here in the United States, and Polar will be part of that innovation boom. Their high-voltage technology has critical customer end uses across the aerospace, automotive, and defense sectors, and this proposed investment would help them introduce new capabilities to manufacture the next generation of semiconductors,” said Under Secretary of Commerce for Standards and Technology and National Institute of Standards and Technology Director Laurie E. Locascio.
“If we want our country to continue leading the global economy, we must stay on the cutting edge of manufacturing. This landmark investment in Polar Semiconductor’s Bloomington facility will be a game changer for domestic semiconductor manufacturing,” said Senator Amy Klobuchar. “I’m proud to have worked with Polar Semiconductor to secure the resources needed to ensure Minnesota continues to be a leader in advanced manufacturing for decades to come.”
Governor Tim Walz said, “As a top state for innovation, education, and workforce training, Minnesota has an established reputation as a leader in the growing high-tech economy. We have been consistent and creative in our support for companies like Polar that want to establish and grow their businesses here in Minnesota. We’re grateful to the Commerce Department for its commitment to Minnesota’s future and its partnership with our state.”
The $75 million state award is through the Minnesota Forward Fund, a new DEED program Gov. Walz signed into law last year to invest $400 million in business growth and attract new companies to Minnesota. It also provides matching funds for companies seeking federal resources like CHIPS Act funding. This is the Minnesota Forward Fund’s first award.
“The Minnesota Forward Fund is one of the ways the Walz-Flanagan Administration is supporting innovative companies like Polar Semiconductor that are helping build Minnesota’s cutting-edge economy,” said DEED Commissioner Matt Varilek. “The number of semiconductor companies in Minnesota is growing, and they’re creating hundreds of new, high-paying jobs every year. I appreciate the Commerce Department’s support as we make this innovative industry even stronger.”
Polar Semiconductor is a leader of the Minnesota CHIPS Coalition, formed by the GREATER Minneapolis–Saint Paul Partnership, the economic development partnership for the 15-county region, in late 2022 after the passage of the federal CHIPS and Science Act. Composed of more than 70 organizations, including manufacturers, supply-chain partners, education and training providers, labor organizations, and state and local governments, the coalition is determined to reinvigorate the region’s legacy in technology and establish the Midwest’s semiconductor industry as a national leader.
“As a key leader in the Minnesota CHIPS Coalition, Polar Semiconductor is accelerating the growth of Minnesota’s existing semiconductor and microelectronics industry with their investment in Bloomington,” said Peter Frosch, President and CEO of the GREATER MSP Partnership. “Together with Polar and more than 70 organizations across industry, government, academia, and community, we have a shared ambition to double the size of the semiconductor and microelectronics industry in Minnesota by adding 10,000 more great jobs. The State of Minnesota’s $250 million match funds for CHIPS, along with federal grants, makes us ready to scale the industry here in Minnesota.”
Polar is leading the Minnesota CHIPS Coalition Workforce Partnership, in collaboration with semiconductor ecosystem companies, educational institutions, employment and training organizations, the Governor’s Workforce Development Board (GWDB), and DEED to develop the high-tech manufacturing workforce of the next generation.
Educational institution partners include the University of Minnesota, University of St. Thomas, Minnesota State College and University System, private technical colleges, and several high school systems in the state. The workforce partnership is already creating impact through training, upskilling, and apprenticeship programs, and will continue to build on its successful collaborative model, partially supported by investments from the State and CHIPS funding.
$1.6 million of Polar’s CHIPS award will be allocated towards its workforce development efforts. Additionally, the workforce partnership expects to leverage preeminent nationwide programs, for example SCALE (Indiana-based DoD program), to boost and supplement local efforts.
“Bloomington has always been a place where innovation thrives. Polar Semiconductor’s significant private investment in expanding its facilities, with potential direct funding from the CHIPS and Science Act and a substantial investment by the State of Minnesota, will boost our local economy and will contribute to the growth and vibrancy of semiconductor manufacturing in Bloomington,” said Bloomington Mayor Tim Busse. “We’re excited to see the tangible benefits of these investments right here in our city, bringing jobs and new opportunities for our workforce and community.”
Original – Polar Semiconductor
