Department of Commerce Announces CHIPS Incentives Letter of Intent with Vulcan Elements to Support Domestic Manufacturing of Critical Rare Earth Magnets

WASHINGTON, D.C. – The Department of Commerce’s CHIPS Program announced today the signing of a non-binding preliminary letter of intent to provide $50 million in proposed federal incentives under the CHIPS and Science Act to Vulcan Elements.  The planned incentives are for the purchase of equipment for the production of domestic Neodymium Iron Boron (NdFeB) magnets which will significantly bolster U.S. critical minerals supply chains. The Department of Commerce will receive $50 million of equity in Vulcan Elements.

This incentive will support equipment utilized for the production of advanced rare earth element separation, metallization, and magnet manufacturing capabilities in the United States.  Vulcan plans to manufacture, process, and produce up to 10,000 metric tonnes of NdFeB magnet material in the next several years, thereby significantly reducing the U.S. NdFeB magnet supply chain gap.

NdFeB magnets have significant commercial and defense applications as they are components in semiconductor manufacturing, robotics, industrial motors, electric vehicles, drones, fighter jets, nuclear submarines and satellites, among others.

“NdFeB magnets are a critical part of the semiconductor supply chain, particularly for semiconductor equipment, such as EUV lithography, chemical vapor deposition, etch, and pump equipment.  Vulcan Elements has strong partnerships with multiple U.S. semiconductor device and equipment companies, and the CHIPS Program’s $50 million incentive will help strengthen the semiconductor supply chain by enabling domestic NdFeB magnet production in the U.S,” said the Director of the CHIPS Program, Bill Frauenhofer.   

In addition to the $50 million incentive from the CHIPS Program, the Department of War’s Office of Strategic Capital announced a $700 million conditional loan commitment with Vulcan Elements and ReElement Technologies to also increase domestic NdFeB magnet production and bolster U.S. critical minerals supply chains.

“Accelerating Vulcan Elements’ rare earth magnet production is strategic to the United States and will have profound ramifications for industries including semiconductors, AI data centers, defense, aerospace, and automobiles,” said the Executive Director of the U.S. Investment Accelerator, Michael Grimes.