Boosting US Semiconductor Production: A $121 Million Investment
The US Commerce Department has taken a significant step towards strengthening the country’s semiconductor supply chain by providing up to $18.2 million in government funding to Akash Systems. This investment will support the construction of a state-of-the-art 40,000-square-foot cleanroom space in West Oakland, California, dedicated to advanced semiconductor manufacturing.
Cutting-Edge Technology for Thermal Management
Akash Systems, a California-based company, will utilize its innovative “Diamond Cooling” technology to develop solutions that address thermal challenges in high-performance computing and communication systems. This technology is particularly crucial for AI-focused data centers, where efficient thermal management is essential.
Private-Public Partnership
The $18.2 million government subsidy will be combined with funding from Akash Systems, venture capital firms, and other private investors, totaling a $121 million investment. This public-private partnership demonstrates the commitment of both the government and private sector to advancing the US semiconductor industry.
Labor Agreements and Industry Firsts
In November 2023, Akash Systems and the IUE-CWA workers union announced labor agreements covering both construction and production workers. Notably, this includes a first-in-the-industry labor neutrality agreement for semiconductor production workers in West Oakland.
A Strategic Move for US Leadership
Commerce Secretary Gina Raimondo emphasized that the Akash award will help ensure the United States remains a global leader in every aspect of the semiconductor supply chain. This move is part of a broader effort to lure chipmakers out of Asia and expand production in the US.
Chips and Science Act: A Bipartisan Initiative
The Commerce Department has awarded around 20 companies approximately $36 billion in preliminary agreements through the bipartisan 2022 Chips and Science Act. While only one deal has been finalized so far, several major awards are expected to be finalized before President-elect Donald Trump takes office in January.
Paving the Way for Future Investments
The Polar Semiconductor deal, worth $123 million, serves as a model for future investments. The company agreed to a five-year ban on stock buybacks and an upside sharing agreement, which requires sharing excess profit with the government as a condition of the funding. This sets a precedent for responsible investment and collaboration between the government and private sector.
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