The Biden administration has finalized the first grant from the Chips Act

The Biden-Harris administration has announced the first binding award from the U.S. Chips and Science Act since allocating over half of the $52 billion in subsidies for semiconductor manufacturing.

Polar Semiconductor will receive up to $123 million in direct funding to expand and modernize its facility in Bloomington, Minnesota, the U.S. Commerce Department said on Tuesday. The funding comes after a preliminary funding agreement signed by Polar and the Commerce Department in May, due diligence by the department, and further negotiations of the final award. Polar will receive the funds after completing its project milestones, the Commerce Department said.

The award will help Polar almost double its production capacity in the U.S. within two years, the Commerce Department said. Polar manufactures sensor and power chips that are used in aerospace, automotive, and defense technologies. The funding will be part of a $525 million investment from private, state, and federal sources to transition Polar into a majority U.S.-owned commercial foundry, the Commerce Department said. It’s currently a majority foreign-owned in-house chips manufacturer.

After its transformation, Polar “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,” Surya Iyer, president and chief operating officer of Polar, said in a statement.

“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,” U.S. Secretary of Commerce Gina Raimondo said in a statement.

With its Chips Act award, Polar is expected to create over 160 jobs in Minnesota for manufacturing and construction.