Polar Semi plans $525M investment in Minnesota fab
Investment will double Polar's US production capacity to nearly 40,000 wafers per month
Polar Semiconductor, a US-based manufacturer specialising in sensor, power, and high-voltage semiconductors, has announced plans to expand its Bloomington, Minnesota manufacturing facility and branch into new technologies.
Polar, which makes BCD and BiCMOS ICs and discrete MOSFET and IGBTs, 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 US Department of Commerce, under which it would receive $120 million in proposed direct funding as part of the US CHIPS and Science Act, and a $75 million investment from the State of Minnesota. In addition, Polar has entered into an agreement in which Niobrara Capital and Prysm Capital are leading an equity investment of $175 million, enabling Polar to transition to a US-owned merchant foundry.
Polar plans to claim the Department of the Treasury’s Investment Tax Credit, which is expected to be up to 25 percent of qualified capital expenditures.
Through these investments, Polar expects to double its current US production capacity of 200mm semiconductor wafers, increasing production from approximately 20,000 wafers per month to nearly 40,000 wafers per month. It will also develop what it describes as 'cutting-edge semiconductor products to 'better serve customers in automotive, aerospace and defence, optoelectronics, MEMS, and medical devices in the US'.
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 US-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 US 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 US Secretary of Commerce Gina Raimondo. “This proposed investment in Polar will crowd in private capital, which will help make Polar a US.-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.”
