Energy Dept. announces $544M loan to boost U.S. semiconductor production

U.S. microchip manufacturing is getting a boost from the Department of Energy.

On Thursday, the agency announced it will loan $544 million to SK Siltron to make silicon carbide semiconductors for electric vehicles.

The Energy Department expects the loan to create about 200 construction jobs for the company to expand its facility in Bay City, Mich., and to create up to another 200 skilled positions through a Michigan New Jobs Training Program with Delta College.

When complete, SK Siltron is projected to rank among the world’s top-five makers of silicon carbide semiconductors, joining Wolfspeed in Durham, N.C.; Coherent Corp. in Saxonburg, Penn.; and Xiamen Powerway Advanced Material Co. in China.

More than 80% of the world’s semiconductor production facilities are based in South Korea, Taiwan, China and Japan, according to the semiconductor industry association, SEMI.

Silicon carbide semiconductors are used to help EVs charge more quickly and travel longer distances than traditional silicon semiconductors.

Increasing SK Siltron’s capacity will help electric vehicle makers secure the chips they need, the Energy Department said. EVs use about twice the number of semiconductors as gas-powered vehicles.

“This project reinforces President Biden’s Investing in America agenda to onshore and re-shore domestic manufacturing technologies that are critical to meeting the Biden-Harris Administration’s ambitious goal that half of all new vehicles sold in 2030 are zero-emissions vehicles,” the Energy Department said in a statement on its website.