US to Grant Akash Systems Up to $18.2 Million for Advanced Semiconductor Manufacturing in California

The U.S. Department of Commerce has announced a grant of up to $18.2 million to Akash Systems to support the construction of a state-of-the-art cleanroom for semiconductor manufacturing in West Oakland, California. The funding is part of the government’s $52.7 billion semiconductor manufacturing and research subsidy program, which aims to strengthen the U.S. position in the global semiconductor supply chain.

This grant will contribute to a total investment of $121 million by Akash Systems, California-based venture capital firms, and other private investors. The investment will be used to build a 40,000-square-foot facility designed to scale production of Akash’s innovative "Diamond Cooling" technology—a breakthrough in thermal management for AI-focused data centers.

Akash’s Cutting-Edge Diamond Cooling Technology

Akash Systems’ Diamond Cooling technology is poised to address one of the most critical challenges in modern computing: thermal management. With AI and high-performance computing systems becoming more powerful, efficient cooling has become essential to prevent overheating and ensure optimal performance. The company’s Diamond Cooling substrates and systems aim to keep these advanced technologies running smoothly, and the U.S. government’s support will help Akash bring this next-gen solution to market at scale.

Akash’s CEO, Felix Ejeckam, expressed the significance of the funding: "As a U.S. company developing next-generation semiconductor technology, this validates our vision and strategy. It helps us deliver cutting-edge solutions to address thermal challenges in today’s high-performance computing and communication systems."

A Win for U.S. Manufacturing and Labor

The investment also supports local job growth. In November 2023, Akash Systems reached labor agreements with the IUE-CWA workers union, covering both construction and production workers for the new facility. The deal includes a first-of-its-kind labor neutrality agreement for semiconductor production workers in West Oakland—further solidifying Akash's commitment to local employment and fair labor practices.

Commerce Secretary Gina Raimondo highlighted the importance of this funding, stating, “This award helps ensure that the United States remains a global leader in every part of the semiconductor supply chain.”

A Key Step in U.S. Semiconductor Reshoring

This funding is part of the broader push to reshore semiconductor production to the U.S., following the passage of the bipartisan 2022 CHIPS and Science Act. The government has already allocated approximately $36 billion in preliminary agreements to 20 companies under this program, aiming to bring chip manufacturing back from overseas, especially from Asia, and reduce reliance on foreign sources for critical semiconductor components.

So far, the Commerce Department has finalized one major deal with Polar Semiconductor, awarding them $123 million to expand their facility in Bloomington, Minnesota. Polar’s deal also includes provisions that ensure the company shares excess profits with the government as part of its agreement.

The Commerce Department is working quickly to finalize additional funding deals before President-elect Donald Trump takes office in January 2025. Major chipmakers, including Taiwan Semiconductor Manufacturing Company (TSMC) and GlobalFoundries, are expected to receive final grants from the Biden administration soon.