US commits $389M to power chips

A chip package aimed at electricity, not just computing

The U.S. Department of Commerce has signed four letters of intent for up to $389 million in federal R&D awards under the CHIPS and Science Act, targeting power semiconductor devices, power modules and critical materials for the domestic energy semiconductor supply chain [1]. The announcement is notable because it shifts attention away from the usual public focus on logic chips and AI accelerators, and toward the components that control, convert and deliver electricity [1].

That distinction matters. Power electronics determine how efficiently electrical energy moves through machines, grids, data centers, industrial equipment and advanced energy systems. Commerce framed the awards as a way to modernize the domestic grid, power critical energy infrastructure loads and make electrical networks more controllable rather than merely passive and one-directional [1]. In practice, this means the government is treating power conversion as a strategic layer of the chip stack.

The package covers four recipients: Helion, Commonwealth Fusion Systems, Vertical Semiconductor and Sibelco [1]. Reuters reported that the awards are intended for companies working on power semiconductor devices and critical materials, including technologies linked to commercial fusion [2]. As a condition of the awards, the U.S. government is set to receive minority, non-controlling and non-voting equity stakes in each company [1].

The four awards: fusion, GaN and quartz

Helion is the largest proposed recipient, with up to $175 million to develop, scale and establish domestic capabilities in high-voltage power semiconductors and advanced energy power modules for high-peak-current pulsed-power applications in fusion power generation [1]. Commerce said those semiconductors would power, control and harvest energy from the magnets that drive Helion’s fusion generators [1].

Commonwealth Fusion Systems is set to receive up to $85 million for R&D in semiconductors used for radio-frequency plasma heating, power electronics, embedded electronics for fusion diagnostics and radiation-hardened electronics [1]. Reuters reported that Commonwealth said the funding would also help develop semiconductor technologies for robotic maintenance systems, with CEO Bob Mumgaard describing the innovations as part of the company’s effort to deploy commercial fusion [2].

Vertical Semiconductor is in line for up to $73 million to advance vertical gallium nitride power semiconductors [1]. Commerce said the technology is intended to enable more efficient and compact power delivery for advanced computing and to demonstrate the technology for a 2.5 MW “super intelligence” data center rack [1]. Reuters described Vertical Semiconductor as an MIT spinout and said the company expects the funding to accelerate R&D of next-generation power transistors and speed domestic production for AI data centers and critical energy infrastructure [2].

Sibelco is set to receive up to $56 million for next-generation purification and finishing technologies for ultra-high-purity quartz [1]. That quartz is used in crystal growth crucibles, processing glassware and other hardware across the semiconductor value chain [1]. Reuters reported that Sibelco North America plans to use the funding for next-generation leaching technologies and a demonstration facility in North Carolina to test new products [2].

Why power semiconductors are strategic

Power chips are not the processors that train large AI models, but they are a prerequisite for the energy systems that increasingly feed those processors. Commerce said improvements in power converter performance can raise power efficiency, improve grid stability and reduce thermal losses [1]. That makes power electronics a bottleneck technology for electrification: vehicles, factories, substations, defense platforms, data centers and fusion machines all need better ways to switch and manage large flows of electricity.

The award structure also shows how U.S. semiconductor policy is widening. Earlier CHIPS Act headlines often centered on leading-edge fabrication plants, advanced packaging or compute capacity. This round is about the infrastructure beneath those markets: pulsed-power devices, GaN transistors, radiation-hardened electronics, advanced modules and quartz materials. Commerce explicitly linked domestic development of these capabilities to reduced reliance on overseas manufacturing, stronger economic and national security, and future U.S. semiconductor leadership [1].

There is also a supply-chain lesson in the inclusion of Sibelco. Ultra-high-purity quartz is not a finished chip, but it is part of the industrial toolchain needed to make chips. By funding purification and finishing technologies, Washington is signaling that resilience does not stop at fabs. It extends to materials, specialized processing knowledge and the intermediate hardware that supports semiconductor manufacturing.

Helion shows the fusion connection

Helion’s announcement gives the clearest view of why the power-chip funding is tied to next-generation energy infrastructure. The company said it signed a letter of intent with the Commerce Department for up to $175 million through the CHIPS Research and Development Office to conduct R&D for next-generation semiconductor technologies for commercial fusion energy [3]. Helion said the expected federal award would be accompanied by $50 million in additional private investment, bringing the combined funding package to $225 million [3].

The company’s fusion systems rely on high-power pulsed electrical systems that must repeatedly and efficiently switch and recover large amounts of energy [3]. Helion said semiconductors meeting its required performance levels are currently available only from overseas manufacturers, and that the CHIPS award would support U.S. development and transition to manufacturing for next-generation high-voltage semiconductors designed for higher efficiency, longer lifetime and more efficient cooling [3].

Helion also specified how the money would be allocated. More than $100 million would support next-generation semiconductor and advanced packaging R&D in Everett, Washington, while approximately $80 million would support tooling, design and process-development R&D with an industry partner in Burlington, Vermont [3]. The remaining funds would support additional work on semiconductor packaging and manufacturing automation [3].

The company said the Everett work would bring more than 100 jobs and substantial power module manufacturing capability to Washington state [3]. That is politically important, but technically the more interesting point is the link between semiconductor packaging and fusion deployment. Fusion generators demand components that can handle repeated high-power electrical pulses, and those requirements push beyond ordinary electronics.

Letters of intent are not final awards

The announcement should not be read as money already fully disbursed. Commerce said the companies have entered into letters of intent, and the final awards will fund R&D projects if completed [1]. Helion likewise described its support as an expected award tied to a letter of intent, not a definitive award agreement [3]. That caveat matters because CHIPS awards typically depend on diligence, milestones and final documentation.

Still, the direction of policy is clear. Washington is using CHIPS R&D money to push domestic capability into the electrical backbone of the next industrial cycle. In one package, the government is tying together fusion startups, AI data center power density, grid modernization, defense-relevant electronics and critical semiconductor materials.

The result is a quieter but potentially consequential turn in U.S. chip strategy. The country is not only trying to localize the processors that compute. It is also trying to localize the components that move the electricity those processors, reactors, factories and grids require. If the logic chip is the brain of modern infrastructure, this $389 million package is aimed at the nervous system that keeps the power moving.

Sources from the last 72 hours

1. [1]Helion Signs Letter of Intent for $175 Million CHIPS Award to Advance U.S. High Voltage Semiconductor R&D to Support Fusion EnergyOct 21, 2026, 2:00 AM
2. [2]Department of Commerce Announces Letters of Intent With 4 Companies for $389 Million of R&D Awards to Strengthen America’s Energy Semiconductor Supply ChainOct 22, 2026, 2:00 AM
3. [3]US to award $389 million in R&D funds for power semiconductors, critical materialsOct 22, 2026, 3:02 PM

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