The Direxion Daily Semiconductors Bull 3x Shares ETF (SOXL) surged more than 5% on Monday, as the U.S. government finalized a $123 million grant to boost domestic chip production capacity.
The U.S. Commerce Department announced that it has awarded the grant to Polar Semiconductor, a Minnesota-based chip maker, to expand its plant and nearly double its production of power and sensor chips. The grant is the first to be finalized under the Biden administration's $52.7 billion semiconductor manufacturing and research subsidy program, known as the CHIPS Act.
Polar Semiconductor plans to use the funds to expand its existing facility, increasing its wafer production from around 20,000 per month to 40,000. The company's chips are used in aerospace, automotive, and defense applications. The state of Minnesota is also contributing $75 million to the $525 million expansion project.
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