The Department of Commerce signed letters of intent with four companies on Thursday for up to $389 million in federal research and development awards under the CHIPS and Science Act, aimed at the semiconductors and materials that control, convert and deliver electrical power. As a condition of the awards, the department will receive a minority, non-controlling and non-voting equity stake in each company, the CHIPS Research and Development Office said in its announcement.
What each company would build
The awards are not yet final. Letters of intent open negotiations over terms, and the money flows only after final award documents are signed. But the announcement sketches a clear set of priorities: power electronics, the hardware that moves electricity through the grid, data centers, defense systems and, in two of the four deals, fusion energy.
The largest commitment, up to $175 million, goes to Helion, a fusion energy company, to develop, scale and establish domestic production of high-voltage power semiconductors and advanced energy power modules. The hardware is designed for the high-peak-current pulsed-power demands of fusion generation - the semiconductors would power, control and harvest energy from the magnets that drive Helion's generators.
Commonwealth Fusion Systems would receive up to $85 million for semiconductors used in radio-frequency plasma heating, power electronics, embedded electronics for fusion diagnostics, and radiation-hardened electronics.
Vertical Semiconductor would receive up to $73 million to advance its vertical gallium nitride power semiconductors, which the company says can deliver power more efficiently and compactly for advanced computing. The funding includes a demonstration of the technology for what the company describes as the world's first 2.5-megawatt data center rack.
Sibelco, a materials company, would receive up to $56 million to develop next-generation purification and finishing technologies for ultra-high-purity quartz, which is used in crystal-growth crucibles, processing glassware and other hardware across the semiconductor supply chain.
Why power electronics
The department framed the awards as an energy play as much as a chip play. Improvements in power converter performance can raise efficiency, improve grid stability and cut thermal losses, the announcement said, and advanced power electronics can turn "passive, unidirectional electrical infrastructure into dynamic, controllable physical networks."
"These CHIPS R&D awards will support breakthroughs in power semiconductor devices and critical materials," said Bill Frauenhofer, the department's executive director of semiconductor investment and innovation, adding that the work would strengthen the country's ability to "convert and deliver power for the grid, advanced data centers, defense systems, and emerging fusion energy."
Secretary of Commerce Howard Lutnick said the investments "expand domestic research, secure critical supply chains, and create high-paying American jobs."
A growing list of government stakes
Thursday's deals follow the same office's July announcement of letters of intent with seven companies for up to $874 million, which also carried equity stakes for the government, as The Hill reported at the time.
The approach was first reported in August 2025, when Reuters said the administration was weighing equity stakes in chipmakers in exchange for CHIPS Act grants. It has since become a recurring condition of federal technology awards, extending well beyond traditional chip fabrication. Earlier this month, Senator Chuck Schumer announced a $1.5 billion federal investment in Wolfspeed, a silicon carbide manufacturer in upstate New York, after urging the Defense and Commerce departments to secure the domestic silicon carbide supply chain. Bloomberg Law noted that Thursday's awards extend the stake-taking pattern to fusion companies and materials suppliers.
What happens next
None of the money is committed yet. Each company must still negotiate a final award with the CHIPS Research and Development Office, which sits inside the National Institute of Standards and Technology. The office funds research rather than factory construction, the part of the CHIPS program that has drawn most of the program's headlines.
If the four awards close at their maximum values, the two rounds of letters of intent announced since July would total more than $1.2 billion in planned federal R&D spending - with the U.S. government holding a small ownership stake in eleven companies as a result.
October 24, 2026