Commerce Plans $389 Million in Semiconductor R&D Awards

By Nathan Brooks

The U.S. Department of Commerce has signed letters of intent to award $389 million to four semiconductor companies for research into power semiconductor devices and critical materials, drawing on the $10 billion fund established under the CHIPS and Science Act enacted in 2022.

Under those letters, the government will receive minority, non-controlling, non-voting equity stakes in the recipients. The commitments finance R&D rather than finished production lines, and the announcement discloses no process node, wafer diameter, revenue or shipment forecast.

Where is the money going?

The four allocations total $389 million:

• Helion: $175 million, the largest award, supports high-voltage power semiconductors and advanced energy power modules for fusion power generation. The Washington-based U.S. fusion startup also expects $50 million in private investment funds alongside the grant.
• Commonwealth Fusion Systems: Up to $85 million will develop semiconductors for radio-frequency plasma heating, power electronics, fusion diagnostics and radiation-hardened electronics.
• Vertical Semiconductor: Up to $73 million will advance vertical gallium nitride power semiconductors for AI data-center racks.
• Sibelco: Up to $56 million will develop next-generation purification for ultra-high-purity quartz used in semiconductor supply chains. The project complements President Donald Trump's earlier announcement that Sibelco would build new semiconductor fabs in North Carolina.

What does Commerce expect?

Bill Frauenhofer, executive director of Semiconductor Investment and Innovation at the Department of Commerce, said: “These CHIPS R&D awards will support breakthroughs in power semiconductor devices and critical materials. Accelerating domestic R&D across these technologies will strengthen America’s ability to convert and deliver power for the grid, advanced data centres, defence systems, and emerging fusion energy.”

Commerce frames the awards around four commercial endpoints: grid power, AI data centers, defense systems and fusion energy. The announcement follows 19 R&D grants to companies over recent months, extending the department's broader support for the U.S. semiconductor industry.

The report presents the awards as support for U.S. strategic autonomy and digital sovereignty. It also links that objective to more secure domestic chipmaking processes and products.

Why do the equity stakes matter?

The arrangement resembles a research grant with a silent shareholder attached. Washington will receive ownership exposure to company growth without operating authority or voting rights.

The stated rationale is to let the public share in financial gains from technological progress and company growth. The broader policy discussion also cites GlobalFoundries’ production-capacity expansion.

It further invokes the American AI Sovereign Wealth Fund Act before the U.S. Senate. The bill seeks a direct public ownership stake in AI development, but it remains a separate proposal, not a condition of these four awards.

Can the grants ease supply constraints now?

Not yet, on the evidence provided. The awards target research and product development; they do not confirm near-term wafer capacity, qualified devices, commercial shipments or lower prices.

The stated benefits include less dependence on a fragile global chip supply chain and mitigation of some shortages. The report links greater resilience for automobiles, electronics and medical equipment to stronger domestic production.

It identifies power as a principal bottleneck in AI infrastructure. For the two fusion companies, advances in power electronics could improve grid efficiency and stability while reducing thermal losses. Those remain engineering goals, not measured commercial gains, and the program also links secure energy flows to economic and national security.

Helion is the only recipient for which the announcement quantifies private investment alongside public support. For Sibelco, the earlier North Carolina fab plan remains a roadmap: the announcement gives no investment size, process technology, wafer size, plant capacity or commissioning date. Vertical’s gallium-nitride chips and Commonwealth’s radiation-hardened electronics remain development targets rather than announced commercial products.

Success now depends on whether these projects convert public funding into qualified power electronics, fusion-related electronics and commercial materials. Commerce has committed the research money; capacity, pricing and competitive effects still depend on execution and product qualification.