The US government has spent billions trying to bring chip manufacturing back home. This time, it wants a piece of the companies developing the technology.
The Commerce Department plans to award $389M to four companies researching power semiconductors and critical materials, taking minority, non-voting equity stakes in return. The funding targets chips that control and convert electricity, with applications ranging from AI data centers to fusion power plants.
Washington wants a stake
The funding comes from a $10B semiconductor research pool approved by Congress in 2022. While 19 research grants have already been awarded, the latest round comes with an additional condition: the government gets an ownership interest.
Helion is the largest recipient, securing up to $175M to develop high-voltage power semiconductors and energy modules for fusion generators. Under a definitive agreement, Commerce would receive a $175M non-voting interest valued against Helion's latest Series G preferred financing.
Helion Gets the Biggest Slice of the $389M Package
Maximum planned CHIPS R&D award by recipient, $M. Letters of intent announced Oct. 22, 2026.
Bar chart. Helion: Award ($M) $175. Commonwealth Fusion Systems: Award ($M) $85. Vertical Semiconductor: Award ($M) $73. Sibelco North America: Award ($M) $56.
The company is also bringing in $50M in fresh private investment, taking the combined funding to $225M. That gives Helion additional capital to develop components it currently has to source from overseas manufacturers.
Fusion needs better chips
Fusion generators rely on electrical systems capable of repeatedly switching enormous amounts of power. The specialized semiconductors needed to handle those demands aren't currently manufactured domestically.
More than $100M of Helion's award will support research and advanced packaging in Everett, Washington, creating over 100 jobs. Another roughly $80M will go toward semiconductor tooling and process development with an industry partner in Burlington, Vermont.
Commonwealth Fusion Systems is receiving up to $85M for radio-frequency plasma heating chips, power electronics, fusion diagnostics, and radiation-hardened components. The company also plans to develop semiconductor technology for robotic maintenance systems.
"Building fusion power plants at scale requires us to accelerate the development of technologies like semiconductors that are critical to making fusion possible."
David Kirtley, Helion
AI has a power problem
Fusion isn't the only industry running into electrical limitations. AI data centers are consuming more power, and the chips responsible for managing that electricity are becoming increasingly important.
Vertical Semiconductor, an MIT spinout, will receive up to $73M to develop vertical gallium nitride transistors. Unlike conventional silicon, gallium nitride can handle demanding electrical applications while losing less energy as heat.
The company is targeting AI racks operating at 2.5 MW, with the goal of reducing energy losses by 30% and cutting the equipment's physical footprint by 50%.
Vertical Semiconductor CEO Cynthia Liao argues that power availability, rather than computing chips themselves, is becoming the biggest constraint on AI expansion.
The fourth recipient, Sibelco North America, will receive up to $56M to improve purification technology for ultra-high-purity quartz, a critical material used in semiconductor manufacturing. Its plans include a demonstration facility in North Carolina.
What Each Award Pays For
Technology and end use for each planned award, as of Oct. 22, 2026.
| Recipient | Maximum award (USD millions) | Technology | End use |
|---|---|---|---|
| Helion | $175 | High-voltage power semiconductors and advanced energy power modules | Fusion power generation magnets |
| Commonwealth Fusion Systems | $85 | Radio-frequency plasma heating chips, power electronics, radiation-hardened electronics | Commercial fusion and robotic maintenance systems |
| Vertical Semiconductor | $73 | Vertical gallium nitride power transistors | AI data center power racks |
| Sibelco North America | $56 | Next-generation purification for ultra-high-purity quartz | Semiconductor manufacturing supply chain |
The investment opportunity extends further
The four recipients aren't the only companies positioned to benefit from demand for more efficient power electronics. The broader shift toward materials such as silicon carbide and gallium nitride is already creating opportunities across the semiconductor supply chain.
Bosch has shipped over 60M silicon carbide chips since 2021 and introduced a third-generation design offering 20% better performance than its predecessor.
The company has also committed up to $2B to convert its Roseville, California facility into a silicon carbide manufacturing hub, supported by up to $225M in federal semiconductor funding.
Yole Intelligence expects the global silicon carbide power chip market to grow from $2B in 2023 to nearly $8B by 2029, reflecting demand for more efficient electrical systems.
Research is advancing alongside commercial production. A University at Albany-led team recently demonstrated a 15-kilovolt silicon carbide transistor, becoming the first US academic institution to achieve that milestone.
GE Aerospace completed most of the fabrication, while UAlbany spinout NoMIS Power handled packaging. Similar devices are currently manufactured in China and Japan, highlighting the domestic capability gap Washington wants to close.
For investors, the opportunity goes beyond the companies receiving government funding. As AI data centers and fusion projects demand more efficient electrical systems, the businesses supplying the chips, materials, and manufacturing technology behind them could become increasingly important.
