U.S. to invest $389M in power chips R&D

U.S. launches $389 million push in power semiconductors

The U.S. Department of Commerce has entered into letters of intent to provide up to $389 million in research and development funding to four companies focused on power semiconductor devices and critical chip materials. The planned awards target technologies that support energy conversion for the power grid, advanced data centers, defense systems and emerging fusion energy. The funding is intended to expand domestic capabilities in next‑generation power electronics and key materials that underpin the semiconductor supply chain.

The commitments are structured through letters of intent rather than final contracts, meaning the actual amounts and detailed conditions remain subject to confirmatory due diligence, further negotiations and internal government approval processes. Nonetheless, the proposed package marks a sizable allocation of federal R&D resources to a concentrated set of projects in power chips and ultra‑high‑purity materials.

Four companies span fusion energy, AI data centers and materials

The largest prospective award, up to $175 million, is earmarked for Helion, a U.S. fusion energy developer. Helion plans to use the funds to develop high‑voltage power semiconductors and advanced power modules required for fusion power generation, where precise control of very high power levels is needed to manage fusion reactions using strong magnetic fields. In addition to the potential government support, Helion plans to raise an extra $50 million from private investors.

Commonwealth Fusion Systems is slated to receive up to $85 million for research and development of semiconductors for radio‑frequency plasma heating, power electronics, embedded electronics for fusion diagnostics and radiation‑hardened electronics. These technologies are aimed at heating and controlling ultra‑high‑temperature plasma inside fusion reactors and ensuring electronics can withstand harsh radiation environments.

Vertical Semiconductor, a spinoff from the Massachusetts Institute of Technology, may receive up to $73 million to develop gallium nitride‑based next‑generation power semiconductors. Its work focuses on chips that can cut energy losses during power conversion and deliver high levels of power efficiently, including technology targeted at 2.5‑megawatt AI data center server racks as electricity use in such facilities climbs.

Boosting critical materials and U.S. semiconductor supply chains

On the materials side, Sibelco’s U.S. operations are set to receive up to $56 million to develop next‑generation purification and finishing technologies for ultra‑high‑purity quartz. This material is used in crystal growth crucibles, processing glassware and other hardware across the semiconductor value chain, as well as in chips, solar panels and specialty glass.

Sibelco plans to use the prospective funding to support testing of new quartz products, chlorination and leaching technologies, and the development of a technology piloting and demonstration facility, including a planned demonstration site in North Carolina. High‑purity quartz from Western North Carolina already serves as a key raw material for semiconductor manufacturing, and the new R&D is intended to advance domestic production capabilities.

Equity stakes align CHIPS funding with taxpayer returns

A notable feature of the $389 million package is its structure. As a condition for making the awards, the U.S. government will receive a minority, non‑controlling and non‑voting equity stake in each of the four companies. These stakes do not confer management control or voting rights but are designed to share in the economic upside of technological advances and corporate growth.

The investments draw on a $10 billion research and development fund created under the CHIPS and Science Act of 2022, which has already supported multiple semiconductor R&D grants. Officials describe the new commitments as a way to accelerate domestic innovation in power semiconductor devices and critical materials while strengthening U.S. supply chains for advanced chips and energy technologies as demand from AI data centers and fusion projects increases.