US Puts $389M Into Semiconductor R&D Under CHIPS Act

The US Commerce Department has awarded $389 million in research and development funding to four companies working on semiconductor development, drawing on the government's CHIPS and Science Act. The outlay comes with an unusual financial condition: Washington will receive minority, non-controlling and non-equity stakes in all four recipients.

Commerce secretary Howard Lutnick framed the investment in terms of national energy capability. The funding, he said in a statement, "will accelerate American semiconductor innovation to enhance our domestic energy and power resources".

The awards are the latest tranche in a broader R&D push. Reuters reported the Commerce Department has now handed out a total of 19 R&D grants to semiconductor companies, all funded from the $10 billion pot Congress created when it approved the CHIPS and Science Act in 2022.

Who gets the money?

The four awards split unevenly, with one company taking nearly half of the total.

• Helion — $175 million. The Washington-based company, the largest beneficiary, develops high-voltage power semiconductors and advanced energy power modules.
• Commonwealth Fusion Systems — $85 million. It will use the money to develop semiconductor technologies for robotic maintenance.
• Vertical Semiconductors — $73 million. Its work spans AI data centre racks.
• Sibelco North America — $56 million.

The concentration on power-related semiconductors rather than logic chips or memory gives the round a distinct profile. Three of the four recipients are tied, directly or indirectly, to energy generation, delivery or the infrastructure that consumes it at scale.

What does the stake condition change?

The requirement that the government take minority, non-controlling and non-equity stakes sets these awards apart from conventional grants. The structure gives taxpayers a claim on future value without putting officials on company boards or diluting founders' control in the way an equity purchase would.

It also signals how the Commerce Department intends to manage the remaining R&D money. Rather than writing cheques and walking away, the department is positioning itself as a financial participant in the technologies it funds.

Bill Frauenhofer, executive director of Semiconductor Investment and Innovation at the Commerce Department, spelled out the strategic logic. "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," he said.

That list of applications reads like a map of current US infrastructure anxieties. Grid modernisation, the power demands of AI data centres, defence supply chains and fusion energy have all attracted federal attention over the past two years.

How does this fit the wider CHIPS picture?

The CHIPS and Science Act, approved in 2022, committed $10 billion to semiconductor R&D alongside the better-known manufacturing incentives that pulled new fab construction into Arizona, Ohio and Texas. The R&D stream targets earlier-stage work, where commercial funding is harder to secure and payback periods stretch beyond typical venture horizons.

At $389 million across four companies, this round represents a modest slice of that $10 billion allocation. The department's running total of 19 grants suggests more awards are flowing steadily rather than arriving in one large batch, allowing officials to spread bets across different semiconductor categories.

For the telecom sector, the round matters at one remove. Power semiconductors and data centre rack technologies sit upstream of network equipment, and the energy demands of AI workloads are already reshaping operator and hyperscaler infrastructure plans. Domestic supply of these components could shorten supply chains that operators have watched nervously since 2020.

Further awards from the R&D fund are expected as the Commerce Department continues to allocate the remaining CHIPS Act money, with the stake-taking structure established this week likely to serve as the template for deals to come.