PITTSBURGH (TNS) — The semiconductor chips coming out of a nondescript fabricator in Youngwood used to be so sensitive that soldiers would rather destroy the computer system than let it fall into enemy hands.

Today, Powerex is building systems for trains, planes and oil rigs as well as MRI machines and wind farms.

A joint venture of Mitsubishi Electric and General Electric, Powerex was one of the final recipients of federal CHIPS and Science Act funding. Military contracts and aviation still account for half of its business, and company leaders say their commitment to quality hasn’t wavered as most other fabrication was shipped overseas.

“All the semiconductor manufacturers moved their fabs to Asia. We never left. We’ve been here the entire time, and we’re very grateful for that award. It’ll go a long way in helping us in Western Pennsylvania,” chief executive Joseph Wolf told the Post-Gazette on a recent visit. “For the semiconductor industry in the U.S., government subsidies are required to be competitive with the rest of the world.”

The Westmoreland County company has benefitted from federal investment at least once before, with the former President Barack Obama Administration’s American Recovery and Reinvestment Act of 2009, which Wolf said allowed Powerex to build its current assembly clean room. It took consistent lobbying, including by high-level union leaders, to keep Powerex under consideration for the most recent federal check.

Manufacturing vice president Dave Penzera said the company’s equipment is dated and expensive to replace. But that’s exactly the type of problem that the CHIPS Act was designed to solve.

With President-elect Donald Trump poised to take office and shift the focus from domestic subsidies to tariffs, the Commerce Department is rushing to finalize contracts to chipmakers around the country. Powerex’s $3 million award represents just a tiny fraction of the $52 billion package for manufacturing and research, but it effectively provides a lifeline to one of the region’s more historic makers.

“The Powerex expansion project represented a great opportunity to grow PA’s chip manufacturing industry, bring jobs to Westmoreland County, and show state support for projects trying to bring in federal funding to Pennsylvania,” the state’s Department of Community and Economic Development said by email. “DCED will continue to look for opportunities to help invest in the chips industry in our Commonwealth and capitalize on the support shown by the federal government.”

Westinghouse roots and foreign reliance

Founded in 1986 by General Electric and Westinghouse Electric, Powerex may very well be the last vertically integrated facility in the U.S. that still fashions silicon chips into power systems.

The raw silicon, however, is actually imported from China.

The long tubes of silver metal grow like rock candy there — seeded on long, durable strings from small silicon crystals. While technically feasible to grow the material domestically, the cost would be extravagant, Mr. Penzera said.

The CHIPS Act funding, however, should allow Powerex to buy equipment that can handle larger wafers — from 3-inch diameter to 5 inches — which would allow it to buy raw silicon from Germany.

If that supply chain sounds limited, it also came somewhat by surprise.

The U.S. used to produce 85% of semiconductors domestically, Mr. Penzera said. As recently as 2015, they were touted as a top export. Yet somewhere along the line that market share slipped to just 15%, he said. Others put the figure below 10%.

The shift was felt in Westmoreland County, where Westinghouse used to employ some 2,000 workers. Today, the Powerex payroll is down to just 210.

The CHIPS Act was designed to even the scales, and was driven largely by concern over China’s aggression toward Taiwan, which controls much of the world’s chip manufacturing — especially for advanced computing like AI.

For Powerex, the $3 million award will mean a larger clean room staffed by about 50 new employees. That workforce could include veterans like Garold Mobley, a project manager who served in the U.S. Coast Guard. Like other veterans plugged into Pittsburgh’s distinct tech sector, Mr. Mobley said working for a defense contractor helps him feel like he’s still serving his country.

The systems coming out of Powerex help power some of America’s top fighter jets, including the F-16, F-35 and F-22. To make sure they don’t fail at altitude, Powerex built its own proprietary heating and electrical stress tests. In practice that looks like long bays of “burn in racks” that warm the system up to 175 degrees.

That’s 175 “centigrade,” said chief technologist Scott Leslie, using the more archaic term for Celsius. Other elements of the center are similarly dated.

Built in 1956, the Powerex facility still handles its own waste water on site. Dusty gauges monitoring air quality still greet workers, despite not being functional. Also nonfunctional is the light on the primary elevator between the facility’s two floors.

It may be hard to imagine such an antique could be a harbinger for the chip renaissance lawmakers hoped for. But company officials said it’s much cheaper to fix up an existing plant than to build a new one.

Powerex expects the total cost of its expansion to be about $15 million. Pennsylvania has pledged up to $1 million for “eligible project costs.” State Rep. Eric Nelson, whose district includes the facility, said that investment is “crucial.”

“Pennsylvania has really been falling behind in incentives for employers to help them reinvest,” he said. “We’re really looking to turn it around.”

Chasing a shifting market

Although much of the recent hype around chips has centered on AI computing, Wolf said the market for his power systems is growing, too.

“We’re faced with increased demand throughout most of our product lines,” he said, adding that CHIPS Act funding will directly help bolster capacity to meet that demand. It hasn’t all been growth though.

“It’s very difficult for us to compete against China,” Wolf said. “Some of those markets we’ve been forced to exit. We’ve been priced out.”

Only two customers buy semiconductor chips directly from Powerex. Most are interested in the integrated power systems, which Wolf likened to a water spigot.

Instead of water, they control the flow of energy to different components in an electrical system, switching on and off thousands of times each second. And unlike the power conductors in a phone, which typically handle a couple of volts, the systems made by Powerex are responsible for thousands of volts associated with the ignition of a fighter jet or locomotive engine.

Despite their technical purpose, the products have simple names: a module, a puck, a stud, a brick, a block. Each serves some purpose toward keeping vital systems around the nation online. Failures are rare, Wolf said, and typically result from a customer using the system beyond its designated threshold.

Penzera said the need for those systems increased as the country became more reliant on electricity.

“When everything is electrified these days, you have to have control over that electrification. And how that happens is semiconductors,” he said.

They’re chasing a new market, too: silicon carbide. There’s at least one major domestic maker of the new compound — said to be more efficient than traditional silicon — and Powerex has turned their material into a power system for oil rigs and deep sea pumps.

They’re also, to chief operating officer Ron Yurko’s knowledge, the first to put carbide to use in the F-22 Raptor.

Measuring impact

The CHIPS Act beneficiaries are by design spread across the U.S. to different-sized players from Vermont to Ohio to Texas.

“The government would like to see the opportunity and innovation be spread more widely,” said Gary Hunt, a semiconductor account manager for Ansys, the Canonsburg-based software company that aids in chip design.

Ansys has benefitted from several CHIPS Act contracts across different initiatives, Hunt said.

At least one other Pennsylvania project has made use of the federal infusion: Infinera plans to use part of a $93 million award granted in October to build a new test and packaging facility in Bethlehem.

That part of the state boasts a similar history of pioneering semiconductor production, with roots back in the 1950s.

“Lehigh Valley was the original Silicon Valley, and many of the talented engineers and developers remain here,” Don Cunningham, president and CEO of Lehigh Valley Economic Development Corp. said in the announcement.

As exciting as it may be to see those pockets of talent come back online, Hunt said it remains to be seen if the federal influx will be enough to make American chipmaking competitive again.

“It’s definitely not chump change, and it’s definitely better than nothing,” he said. “Whether it’s enough, I don’t know. I don’t think anybody knows.”