The U.S. Department of Commerce said on October 22 that it has signed letters of intent with four companies for up to $389 million in federal research and development awards under the CHIPS and Science Act. The department said the awards target the semiconductors and materials needed for “the control, conversion, and delivery of power,” for uses including the electric grid, data centers, defense systems and fusion energy.

The four proposed awards come from the CHIPS Research and Development Office. As a condition of the awards, the department said it “will receive a minority, non-controlling and non-voting equity stake in each company,” which it described as enhancing the return for the U.S. taxpayer.

The four projects

According to the department’s announcement, the letters of intent cover:

  • Helion, up to $175 million, for high-voltage power semiconductors and advanced energy power modules designed for high-peak-current pulsed-power applications in fusion power generation.
  • Commonwealth Fusion Systems, up to $85 million, to develop semiconductors for radio-frequency plasma heating, power electronics, embedded electronics for fusion diagnostics, and radiation-hardened electronics.
  • Vertical Semiconductor, up to $73 million, to advance vertical gallium nitride (GaN) power semiconductors for more efficient and compact power delivery in advanced computing, including a demonstration for what the department called the world’s first 2.5 MW “super intelligence data center rack.”
  • Sibelco, up to $56 million, to develop next-generation purification and finishing technologies for ultra-high-purity quartz used in crystal growth crucibles, processing glassware and other semiconductor supply chain hardware.

Commerce Secretary Howard Lutnick said: “These investments expand domestic research, secure critical supply chains, and create high-paying American jobs.” Bill Frauenhofer, the department’s executive director of semiconductor investment and innovation, said the awards “will support breakthroughs in power semiconductor devices and critical materials.”

Helion’s plans in Washington and Vermont

Helion, the largest of the four, said it will add $50 million in private investment to the award, for a total of $225 million. The company said more than $100 million will support next-generation semiconductor and advanced packaging R&D in Everett, Washington. Approximately $80 million will support R&D on semiconductor tooling, design and process development with an industry partner in Burlington, Vermont, and the remaining funds will go to semiconductor packaging and manufacturing automation.

Helion said the work would bring more than 100 jobs and “substantial power module manufacturing capability” to Washington state. It said semiconductors that perform at the levels it requires “are currently only available from overseas manufacturers.”

The company also set out the equity terms in more detail. Upon entering a definitive award agreement, Commerce would receive a $175 million non-voting interest in Helion based on its most recent Series G preferred stock valuation, as payment for entering into the award. David Kirtley, Helion’s CEO, said the funding “will allow Helion to develop and manufacture advanced semiconductors here in the United States.”

Sibelco’s quartz work

Sibelco said its U.S. unit, Sibelco North America, Inc., signed the letter of intent for up to $56 million for R&D on high-purity quartz processing and product technologies. The release, datelined Spruce Pine, North Carolina, lists four areas: next-generation leaching technologies, next-generation hot chlorination technologies, high-purity quartz product engineering, and a piloting and demonstration facility to test, validate and scale new processes and products.

Sibelco described high-purity quartz as “an essential raw material” for quartz components used in semiconductor manufacturing. Hilmar Rode, Sibelco’s CEO, said the proposed award “would enable us to accelerate our research and development activities in the United States.”

Why it matters

The package directs CHIPS R&D money at power electronics and an upstream material. Two of the four projects are tied to fusion companies, one to data center power delivery, and one to a raw material that Sibelco says is essential for quartz components used in semiconductor manufacturing.

The equity condition is also notable for companies weighing CHIPS funding. Each letter of intent comes with a government stake in the recipient, and Helion’s release puts a value on that stake equal to its full award amount.

What to watch

These are not final awards. Sibelco said its letter of intent is subject to confirmatory due diligence, further negotiations and the U.S. government’s internal approval process. Helion said the equity interest would take effect upon a definitive award agreement. Neither company gave a date for final terms.

The caveats

All award amounts are maximums. Job and investment figures for Helion come from the company’s own release. The department’s announcement did not give locations for the projects, and Sibelco’s release did not say where its piloting facility would be built.