By Hamza Faisal
The United States is putting nearly $389 million behind the unglamorous chips that move electricity around — and taking ownership stakes in return. The Commerce Department announced on Thursday that it had signed letters of intent to provide four new research and development awards for power semiconductor devices and critical materials, with the US government receiving minority, non-controlling, non-voting equity stakes as a condition of the funding.
Power semiconductors are the workhorses of the electrified economy: they switch and condition the current in everything from electric-vehicle drivetrains to AI data-center racks to the magnets that hold a fusion reaction together. Two of the four awards go to fusion startups, one to a gallium-nitride chip maker targeting data centers, and one to a materials company that purifies the quartz underpinning the semiconductor supply chain.
Fusion gets the lion's share
Washington-based Helion, a fusion energy developer, is the biggest winner: up to $175 million to develop high-voltage power semiconductors and advanced energy power modules for fusion power generation. The semiconductors will both power and harvest energy from the magnets driving Helion's fusion generators. Helion said the award will be accompanied by $50 million in new private investment. "Building fusion power plants at scale requires us to accelerate the development of technologies like semiconductors that are critical to making fusion possible," said CEO David Kirtley.
Massachusetts-based Commonwealth Fusion Systems will receive up to $85 million to develop semiconductors for radio-frequency plasma heating, power electronics, fusion diagnostics, and radiation-hardened electronics. CEO Bob Mumgaard said the funding will also advance robotic maintenance systems for fusion plants, calling the work "a vital part of our global effort to deploy commercial fusion."
AI data centers and the quartz bottleneck
Vertical Semiconductor is set for up to $73 million to advance its vertical gallium nitride power semiconductors — the wide-bandgap chips that convert power more efficiently inside AI data-center racks, where every percentage point of conversion efficiency translates directly into electricity bills. Sibelco will receive up to $56 million to develop next-generation purification for ultra-high-purity quartz, the crucible material used to grow the silicon ingots behind every chip.
The awards come from the $10 billion research and development fund Congress approved in 2022 under the CHIPS and Science Act. The department has awarded 19 R&D grants to semiconductor firms in recent months. Commerce Secretary Howard Lutnick said the awards will "accelerate American semiconductor innovation to enhance our domestic energy and power resources."
Grants with strings attached
The equity condition is the notable twist: unlike a plain grant, Washington gets a minority equity position in each recipient. The stakes are explicitly non-controlling and non-voting, but the arrangement still extends the administration's direct-investment posture deeper into the chip supply chain — from the CHIPS Act's manufacturing subsidies to the materials and power-electronics layers underneath them. Letters of intent are not final contracts, so each award must still survive negotiation before the money flows.
By Hamza Faisal
