Funding and government stakes
The US Department of Commerce will provide up to $389 million, approximately 515 billion won, to four companies to develop power semiconductor technologies needed for fusion power generation and artificial intelligence (AI) data centers.
According to Cryptopolitan on October 27, local time, the funding does not directly target bitcoin mining companies, but it could also affect the power procurement environment for miners expanding into AI data center businesses.
The US Department of Commerce signed letters of intent with four companies on October 22. The money will come from research and development funding under the CHIPS and Science Act, enacted in 2022. The US National Institute of Standards and Technology (NIST) said the funding would support the development of semiconductors and materials for controlling, converting and supplying power for applications including electricity grids, defense and data centers.
The funding is drawing attention because the government will acquire equity in the companies in exchange for subsidies. The government plans to acquire non-voting minority stakes in each company that do not affect management control.
Support for fusion and data center technologies
The largest allocation goes to fusion company Helion. Helion will receive up to $175 million, approximately 232 billion won, to develop high-voltage power semiconductors and energy modules needed for fusion power generation. Helion CEO David Kirtley said the development of core technologies, including semiconductors, must be accelerated to enable the deployment of large-scale fusion power plants. Helion plans to raise an additional $50 million, approximately 66 billion won, in private investment, bringing the total size of the related project to $225 million, approximately 298 billion won.
Massachusetts-based Commonwealth Fusion Systems will receive up to $85 million, approximately 112.574 billion won. The funding will be used to develop semiconductors and power electronics for plasma heating, fusion diagnostics and radiation-resistant technologies. Commonwealth Fusion Systems CEO Bob Mumgaard said the technologies would play an important role in the global deployment of commercial fusion power.
AI data center technologies will also receive support. Massachusetts Institute of Technology (MIT) spinout Vertical Semiconductor will receive up to $73 million, approximately 97 billion won, to develop vertical gallium nitride (GaN) power semiconductors that improve the power efficiency of AI server racks. This includes technology demonstrations related to 2.5 MW data center racks. Sibelco will receive up to $56 million, approximately 74 billion won, to develop refining technologies for ultra-high-purity quartz used in semiconductor production.
Potential effects and funding scale
Bitcoin miners and AI data center operators both face the challenge of improving power efficiency and reducing cooling costs. Better performance from power conversion semiconductors could help both sectors reduce costs. Commercial fusion power could expand electricity supply options over the long term, but this funding will not immediately lead to lower electricity prices.
The funding is relatively small compared with the private capital secured by fusion companies. Commonwealth Fusion Systems has raised approximately $4 billion, about 5.298 trillion won, while Helion has secured approximately $3.2 billion, about 4.237 trillion won, in committed capital. The Fusion Industry Association previously asked the government to provide $10 billion, approximately 13.242 trillion won, in one-time funding, with $5.4 billion, approximately 7.1506 trillion won, allocated to startups.
US Secretary of Commerce Howard Lutnick said the funding was intended to promote US semiconductor innovation and strengthen domestic energy and power resources. Issues to watch include how attractive the government's equity participation model will be to private investors and how improvements in power efficiency will affect miners' expansion into AI businesses.
Original Korean article: digitaltoday.co.kr
English brief by Korea Wind Intelligence, koreawindintel.com
