Polar Semiconductor is a semiconductor company based in Minnesota, United States, focused on the production of sensors, power supplies, and high-voltage wafers. The company was the first to receive CHIPS Act funding, is jointly owned by Allegro Microsystems and Sanken Electric, and is one of Allegro's primary suppliers of 200mm wafers. Polar Semiconductor recently received $123 million in funding from the United States Department of Commerce, the first binding award under the CHIPS Act. The funds will be used to expand its Minnesota facility and significantly increase its capacity to produce power and sensor chips. It is reported that Polar's goal is to become the first power chip foundry.
The power management chip (PMIC) is a key device in electronic equipment, which is responsible for the control functions of power conversion, distribution, and detection required by electronic equipment. With the development of downstream markets such as 5G communications, new energy vehicles, and the Internet of Things, the number and types of electronic devices continue to grow, and the management of the power application performance of these devices will become more and more important, thereby driving the growth of demand for power management chips. In the Chinese market, the market size of power management chips will exceed US$13.2 billion in 2021, accounting for about 36% of the global market share. In 2022, the global power management chip market will exceed $40 billion, and the preliminary statistics of China's market size will be about $15 billion. The Chinese market has maintained steady growth in the field of power management chips, with a market size of 101 billion yuan in 2022 and is expected to reach 128.44 billion yuan in 2026.
According to the search results, the global power management chip market will reach about $44.7 billion in 2023, with an average annual compound growth rate of 11.52% in the past five years. Analysts at the China Business Industry Research Institute predict that the global power management chip market will increase to $48.6 billion in 2024. In addition, according to the research report of QYResearch, the global power management driver chip market size will be about 9.142 billion US dollars in 2023, and it is expected to reach 19.873 billion US dollars by 2029, with a compound annual growth rate of 7.93%.
Figure: Polar may become the first power chip foundry
The expansion is expected to begin construction in 2024 and be completed in 2025. This will help Polar Semiconductor create a new United States-owned foundry and increase monthly production capacity from approximately 20,000 to 40,000 wafers to meet aerospace, automotive and defense needs.
In addition, Polar Semiconductor received a total of $525 million in private, federal, and state funding to transform from a foreign-owned in-house manufacturer to a United States-controlled commercial foundry. This marks an important milestone in the implementation of the CHIPS and Science Act, which will help strengthen national and economic security, strengthen supply chains, and create more high-quality jobs.
Polar Semiconductor's expansion plan is also strongly supported by the state of Minnesota, including a $75 million investment from the state government and a $175 million equity investment led by Niobrara Capital and Prysm Capital, which will enable Polar to United States transform into a wholly owned commercial foundry.
With these investments, Polar Semiconductor expects to double its current 200mm semiconductor wafer production capacity in the United States, increasing production from about 20,000 wafers per month to nearly 40,000 wafers per month; Expand and modernize its facilities with new automation and AI capabilities to increase global competitiveness through economies of scale; To better serve customers in United States automotive, aerospace and defense, optoelectronics, MEMS, medical devices and other fields with cutting-edge semiconductor products; More than 160 new jobs were created, further strengthening Polar's support for the community.
This move by Polar Semiconductor not only reflects the importance that the United States government attaches to the semiconductor manufacturing industry, but also demonstrates the United States's determination to improve domestic chip production capacity and ensure the security of the supply chain.
