US Plans $389 Million in Power Semiconductor and Materials Research Awards
The US Department of Commerce plans to provide up to $389 million in research and development funding to four companies working on power semiconductors and critical materials. The US power semiconductor funding programme aims to strengthen domestic capabilities in technologies used for energy infrastructure, fusion power generation, advanced computing and semiconductor manufacturing.
Announced on October 22, the proposed awards are being issued through the CHIPS Research and Development Office under the CHIPS and Science Act. The department has signed letters of intent with the four companies, but the awards remain subject to final agreements. The funding structure will also give the US government minority, non-controlling and non-voting equity stakes in the recipients.
US Power Semiconductor Funding Targets Four Companies
The proposed awards cover different parts of the semiconductor and materials supply chain, with the largest allocations directed towards technologies for fusion energy.
Helion — up to $175 million: The fusion energy company will develop high-voltage power semiconductors and advanced power modules for systems that control and recover energy from the magnets in its fusion generators.
Commonwealth Fusion Systems — up to $85 million: The company will develop semiconductors for radio-frequency plasma heating, power electronics, fusion diagnostics and radiation-hardened electronics.
Vertical Semiconductor — up to $73 million: The funding will support vertical gallium nitride (GaN) power semiconductors designed to improve power delivery for advanced computing, including AI data centres.
Sibelco — up to $56 million: The materials supplier will develop purification and finishing technologies for ultra-high-purity quartz used in semiconductor manufacturing equipment and processes.
The allocations total up to $389 million. They are intended to support research and domestic development rather than represent completed commercial production capacity.
Why Power Semiconductors Matter Beyond AI Chips
Power semiconductors perform a different role from processors that execute AI workloads. They control, convert and deliver electrical energy in systems ranging from industrial equipment and power supplies to electricity grids and data centres.
Improving power electronics can reduce energy losses and heat generation while helping equipment operate more efficiently. These capabilities matter as data centres require greater amounts of electricity and energy-intensive technologies, including fusion research, demand specialised power systems.
Gallium nitride is one material being developed for more efficient power devices. Vertical Semiconductor's proposed project focuses on advancing vertical GaN technology for compact, high-density power delivery in advanced computing environments.
The other awards address different requirements. Helion and Commonwealth Fusion Systems are developing technologies for fusion systems, while Sibelco's work focuses on high-purity quartz, a material used in components throughout the semiconductor manufacturing process.
Government Funding Comes With Equity Stakes
The Commerce Department said the government will receive minority, non-controlling and non-voting equity stakes in each recipient as a condition of the awards. This differs from funding structures that provide financial assistance without an equity interest.
The programme draws on a $10 billion semiconductor research fund approved by Congress in 2022. The department said it had made 19 semiconductor R&D awards from the fund in recent months before announcing the four new letters of intent.
The awards form part of a broader effort to expand US research and development capabilities and reduce reliance on overseas manufacturing for strategically important technologies. However, the announced amounts are maximum proposed awards, not evidence that the full funding has already been disbursed.
What the Awards Mean for US Semiconductor Research
The projects connect semiconductor research with several infrastructure priorities: energy conversion, fusion power, advanced computing and the supply of specialised manufacturing materials.
The immediate next step is finalising the award agreements and moving the funded research forward. Whether the projects lead to commercially competitive technologies will depend on technical progress, manufacturing scale and the ability to integrate the results into real-world systems.
For now, the $389 million package represents planned federal support for a range of semiconductor and materials technologies. Its eventual impact will depend on how successfully the four companies turn the research into usable products and domestic production capabilities.
