Introduction
Powerex, a semiconductor manufacturer based in Hempfield, is poised to receive a $3 million federal investment under the CHIPS and Science Act.
This investment will play a crucial role in the company’s expansion, enabling it to boost its manufacturing capacity and create new jobs. As the demand for high-power semiconductors continues to grow, this funding promises to further strengthen the company’s position in both military and commercial sectors.
Key Highlights
- Federal Investment: The CHIPS and Science Act will receive $3 million to Powerex.
- Capacity Expansion: This funding allows Powerex to nearly double its production capacity.
- Job Creation: The expansion will add around 75 jobs in manufacturing and construction.
- Manufacturing Focus: Powerex produces semiconductors for military use, commercial aircraft, and renewable energy projects.
- Global Supply Chain Challenges: Powerex faces challenges due to rising tariffs on semiconductor components.
A Closer Look at Powerex’s Expansion
Powerex manufactures semiconductor chips that are critical for various high-tech applications, including military aircraft, solar power projects, and wind energy systems. Located in Hempfield at a former Westinghouse Electric Co. facility, the company is now gearing up for significant growth with the help of federal funding.
According to Joseph Wolf, CEO of Powerex, the $3 million in funding will help the company almost double its production capacity. This expansion will enable Powerex to meet increasing demand for its high-power semiconductors.
The federal investment is a part of the Biden administration’s broader push to strengthen domestic semiconductor manufacturing through the CHIPS and Science Act, a key initiative aimed at reshoring semiconductor production and ensuring the U.S. remains competitive in global markets.
Expansion Plans and Investment Breakdown
Powerex expansion plans are set to cost around $15 million, receive with $3 million coming from the federal government. Wolf emphasized that the company would cover the remaining cost of the expansion.
The funding will help the company add new equipment and upgrade its facilities, making it one of the few U.S. manufacturers to still produce its own semiconductors, including raw silica sourcing from China, Europe, and Japan for commercial products and exclusively from domestic sources for military applications.
Powerex plans to expand within its existing facility, originally built in 1956, by adding 4,000 square feet to the plant’s “clean room.” This specialized area tightly controls impurities to maintain high-quality standards in semiconductor production.
Moreover, the expansion will create approximately 55 new manufacturing jobs and 20 construction jobs, boosting local employment and contributing to Westmoreland County’s economy.
Boosting Local Employment
Powerex’s growth is not just about increased production capacity—it also means new job opportunities for the local workforce.
Since last year, the company has added approximately 30 new employees, expanding its workforce from 180 to 210. The expansion will bring an additional 20 to 30 jobs, with entry-level technicians set to earn around $18.50 per hour, plus benefits.
This growth is vital not just for the company but also for the community, as it strengthens the region’s role in semiconductor manufacturing.
Role in National Defense and Commercial Markets
Powerex plays a significant role in both the defense and commercial sectors. The company manufactures semiconductor power modules used in advanced military systems like the F-35 fighter jet, as well as in commercial aircraft.
With more than half of its production dedicated to military applications, Powerex is a critical supplier for the Department of Defense (DoD), ensuring that high-tech defense systems are equipped with reliable semiconductor components.
The company’s expansion will help it meet the growing demand for these essential components, particularly in the military and aerospace sectors, where performance and reliability are paramount.
Furthermore, as the renewable energy market expands, the demand for semiconductors used in solar power projects and windmills is also expected to rise, providing Powerex with diverse growth opportunities.
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Economic Implications of the CHIPS Act
The $3 million federal investment receive in Powerex is part of a larger initiative under the CHIPS and Science Act, which aims to increase U.S. production of semiconductors and reduce dependence on foreign supply chains.
This funding underscores the government’s commitment to boosting domestic manufacturing and creating high-paying jobs in advanced technology sectors.
Powerex’s success is an example of how these federal investments can transform local economies.
The CHIPS and Science Act has already led to several other investments across the U.S., and companies like Powerex are benefiting from this renewed focus on high-tech manufacturing.
Rising Tariffs and Supply Chain Challenges
While the CHIPS Act funding offers a promising outlook for Powerex, the company faces significant challenges, particularly regarding the rising tariffs on semiconductor components.
The Trump administration introduced 25% tariffs, set to rise to 50% in 2025. These hikes impact costs, and Powerex is working with customers to manage the increases.
Despite challenges, Powerex remains optimistic. Competing globally requires high-quality, reliable semiconductors made domestically.
Federal funding and infrastructure investments strengthen Powerex’s position. The company aims to thrive in the competitive global market.
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Local Support and Future Prospects
Local officials in Westmoreland County are enthusiastic about Powerex’s expansion. Notably, Westmoreland County Commissioner Ted Kopas, a Democrat, highlighted the importance of the CHIPS Act in further strengthening the region’s role in high-tech manufacturing.
Moreover, he emphasized that the investment in Powerex not only boosts the local economy but also helps solidify the county’s reputation as a growing hub for manufacturing and innovation.
On the other side of the political spectrum, Republican leaders, including Sean Kertes, the chairman of the Westmoreland County commissioners, also praised the expansion.
Kertes emphasized that the investment in Powerex is part of a broader effort to bring manufacturing jobs back to the U.S. and support local industries.
As Powerex looks to expand, the local economy stands to benefit from the influx of new jobs and investment in advanced manufacturing capabilities.
The company’s success could serve as a model for other businesses in the region, further solidifying Westmoreland County’s position as a leader in high-tech manufacturing.
Conclusion
The $3 million federal investment in Powerex is a significant step toward boosting semiconductor manufacturing in the U.S.
The funding will help the company expand its capacity, create new jobs, and strengthen its role in both defense and commercial markets.
With rising demand for semiconductors and a growing emphasis on reshoring manufacturing, Powerex is well-positioned for future success. However, challenges such as rising tariffs and supply chain issues remain.
Nevertheless, with the continued support of initiatives like the CHIPS and Science Act, Powerex’s future looks bright, and it stands as a key player in the ongoing transformation of the U.S. semiconductor industry.
