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The award, part of the Biden administration's $52.7 billion
semiconductor manufacturing and research subsidy program,
follows an agreement by Polar's current owners to sell down
their stakes to U.S. private equity firms so that the company
can become majority U.S.-owned.
The Commerce Department, which made the grant, noted shortages
of power and sensor chips were a key issue during the COVID-19
pandemic, disrupting many sectors.
Under Secretary of Commerce Laurie Locascio said Polar's
"technology plays a critical role in high-voltage applications
across the aerospace, automotive, and defense sectors and this
proposed investment would enable new capabilities to manufacture
the next generation of semiconductors."
The state of Minnesota is also contributing $75 million to the
$525 million project.
Polar is currently 70% owned by Sanken Electric and 30% held by
Allegro MicroSystems.
Last month Sanken said that Niobrara Capital and Prysm Capital
plan to invest $175 million for around 59% of Polar. Sanken's
holding will drop to around 30% and Allegro's stake will fall to
around 10%.
The Biden administration has announced seven other planned
awards including up to $6.4 billion in grants to South Korea's
Samsung to expand chip production in central Texas.
Intel won $8.5 billion in grants in March while Taiwan's TSMC
clinched $6.6 billion last month to build out its American
production. The Commerce Department also said last month it
plans to award memory chip maker Micron Technology $6.1 billion
to help fund domestic chip factory projects. More awards are
expected this year.
All the awards have yet to be finalized and amounts could change
after the Commerce Department conducts due diligence.
(Reporting by David Shepardson; Editing by Edwina Gibbs)
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