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Polar Semiconductor Invests $525 Million to Expand Semiconductor Manufacturing Facility in Minnesota

The investment will create more than 160 jobs.

Chips
iStock.com/Mykola Pokhodzhay

Polar Semiconductor 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.

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
  • Create over 160 new jobs to further strengthen Polar’s support of its community

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.

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.

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.

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