- Polar’s Historic $525 Million Investment to Be
Supported by Minnesota State Incentives and Potential Federal
Funding from the CHIPS and Science Act
- Niobrara Capital and Prysm Capital Will Lead
$175 Million Equity Investment in Polar to Become Majority
Investors and Transition Company to U.S.-Owned Foundry
- Investment Plan Will Double Polar’s Domestic
Semiconductor Manufacturing Capacity and Create Over 160 New Jobs
in Minnesota
Polar Semiconductor (“Polar” or the “Company”),
the only U.S.-based manufacturer specializing in sensor, power, and
high-voltage semiconductors, today 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, including capital from private investors and $75 million
from 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.”
About Polar Semiconductor
Headquartered in Bloomington, Minnesota, Polar Semiconductor is
a US-based manufacturer with more than 60 years of experience
fabricating power semiconductor devices and sensors that serve
automotive, consumer and industrial markets. Polar's semiconductor
manufacturing facilities operate with state-of-the-art automation
systems to manufacture Integrated Circuit (BCD, BiCMOS) and
discrete (MOSFET, IGBT) 8-inch silicon wafers for the power and
sensor markets. As an automotive qualified fab, Polar is committed
to the highest levels of manufacturing and product quality. For
more information, visit https://polarsemi.com. At the closing of
the transactions contemplated in the definitive agreement, Polar
will be majority owned by Niobrara Capital and Prysm Capital. Polar
is currently jointly owned by Sanken Electric Co., Ltd. (“Sanken”)
(6707.T) and Allegro MicroSystems, Inc. (“Allegro”) (Nasdaq: ALGM).
Sanken and Allegro will maintain their investments in Polar, become
minority owners, and continue their relationship as foundry
customers.
About Niobrara Capital
Niobrara Capital is led by Chip Schorr, a pioneer in technology
private equity investments. The firm focuses on new and innovative
approaches to investing and building value for its stakeholders.
For more information, please visit www.niobraracap.com.
About Prysm Capital
Prysm Capital is a growth equity firm focused on partnering with
founders and management teams who are disrupting industries and
building category-leading companies. With offices in New York,
Princeton, and San Francisco, Prysm acts as a flexible source of
growth capital for companies in the technology and consumer
sectors. For more information, visit www.prysmcapital.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20240513358871/en/
Polar Semiconductor 952-876-3000 info@polarsemi.com
Niobrara Capital Dan Gagnier Gagnier Communications
Niobrara@gagnierfc.com
Prysm Capital Adam Pollack / Ed Trissel Joele Frank,
Wilkinson Brimmer Katcher 212-355-4449