US Commerce Plans $389M in Semiconductor R&D Awards, Taking Minority Equity Stakes in Four Companies

What happened

The US Commerce Department announced on Oct 22, in a press release published by the National Institute of Standards and Technology (NIST), that it has signed letters of intent with four companies for up to $389 million in federal R&D awards under the CHIPS and Science Act, for power semiconductor devices, modules and critical materials in the semiconductor supply chain. "The Trump Administration is accelerating American semiconductor innovation to enhance our domestic energy and power resources," said Secretary of Commerce Howard Lutnick.

The four companies have different assignments: fusion energy company Helion will receive up to $175 million to develop high-voltage power semiconductors and advanced energy power modules for its fusion generators; Commonwealth Fusion Systems will receive up to $85 million for semiconductors for radio-frequency plasma heating, power electronics, fusion diagnostics and radiation-hardened electronics; Vertical Semiconductor will receive up to $73 million to advance vertical gallium nitride (GaN) power semiconductors for efficient, compact power delivery for advanced computing and to demonstrate the technology for the world's first 2.5 MW "super intelligence" data center rack; Sibelco will receive up to $56 million to develop next-generation purification and finishing technologies for ultra-high-purity quartz used in crystal growth crucibles and hardware across the semiconductor value chain.

As a condition of the awards, the Commerce Department will receive a minority, non-controlling, non-voting equity stake in each company — a move the press release says is intended to "enhance the return for the U.S. taxpayer." Reuters added that in recent months the Department has already awarded 19 R&D grants to semiconductor firms from a $10 billion fund approved by Congress in 2022.

Key facts

1. Breakdown: : up to $389 million — Helion $175M, Commonwealth Fusion Systems $85M, Vertical Semiconductor $73M, Sibelco $56M
2. Equity condition: : the government receives a minority, non-controlling, non-voting equity stake in each company
3. Authority: : the CHIPS and Science Act; Reuters says the Department has awarded 19 R&D grants from the $10 billion fund in recent months
4. AI link: : Vertical Semiconductor's vertical GaN technology will be demonstrated for the world's first 2.5 MW "super intelligence" data center rack
5. Official line: : Bill Frauenhofer, Executive Director of Semiconductor Investment and Innovation at the Department of Commerce, said accelerating domestic R&D across these technologies will strengthen America's ability "to convert and deliver power for the grid, advanced data centers, defense systems, and emerging fusion energy"