Biden-Harris Administration Announces CHIPS Incentives Awards with BAE Systems, and Rocket Lab to Expand Production of Chips Critical for U.S. National Security and Space Industry

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The Biden-Harris Administration announced that the U.S. Department of Commerce has finalized two separate awards under the CHIPS Incentives Program’s Funding Opportunity for Commercial Fabrication Facilities. The Department awarded BAE Systems Electronic Systems, a business unit of BAE Systems, Inc., up to $35.5 million in direct funding, and awarded Rocket Lab, the parent company of space power provider SolAero Technologies Corp., up to $23.9 million in direct funding. The awards come after the previously signed preliminary memoranda of terms, announced on December 11, 2023, and June 11, 2024, respectively, and the completion of the Department’s due diligence. The Department will disburse the funds based on the companies’ completion of project milestones.

“From satellites in space to defense systems on the ground, our most advanced defense and commercial technology rely on mature-node and compound semiconductors to operate,” said Under Secretary of Commerce for Standards and Technology and National Institute of Standards and Technology Director Laurie E. Locascio. “By finalizing these awards, we are strengthening America’s domestic semiconductor supply chain resilience and broadening our manufacturing capabilities. Thanks to this investment, the United States is continuing to develop new pathways for the innovation that will reinforce our nation as a global technology leader for decades to come.”

“America's space and military systems are the most capable in the world, and that would not be possible without advanced semiconductor technology,” said Arati Prabhakar, Assistant to the President for Science and Technology and Director of the White House Office of Science and Technology Policy. “Thanks to President Biden and Vice President Harris' leadership, we're making the semiconductor supply chain investments today that will bolster American global competitiveness and security tomorrow.”

The awards announced today would support the following projects:

BAE Systems, Inc.: The Department’s award of up to $35.5 million will support the modernization of the company’s Microelectronics Center in Nashua, New Hampshire, which is designated as a Trusted Foundry by the U.S. Department of Defense. As a result of the modernization, the company will quadruple its production capacity for Monolithic Microwave Integrated Circuit (MMIC) chips, which are critical components for advanced military aircraft and commercial satellite systems, and replace aging tools with the latest technology and equipment, mitigating the risk of an operational disruption. The investment will also cut the company’s modernization timeline in half, bolstering the facility’s ability to serve mission-critical defense programs. For more information about the award, please visit the CHIPS for America website.

Rocket Lab: The Department’s award of up to $23.9 million will create a more robust and resilient supply of space-grade solar cells that power spacecrafts and satellites. Rocket Lab is one of two companies in the United States that specialize in the production of highly efficient and radiation resistant compound semiconductors called space-grade solar cells – devices used in space to convert light to electricity. Rocket Lab’s space-grade solar cells are key to important U.S. space programs, such as missile awareness systems and world-leading science missions, including the James Webb Space Telescope, NASA’s Artemis program, the Ingenuity Mars Helicopter, and the Mars Insight Lander. Rocket Lab’s technology also serves a growing commercial satellite market. The Department’s investment will support the modernization and expansion of Rocket Lab’s facility in Albuquerque, New Mexico, which will increase the company's compound semiconductor production by 50% within the next three years – helping to meet the growing national security and commercial demand for these solar cells in the United States. The investment is expected to create over 100 direct jobs. For more information about the award, please visit the CHIPS for America website.

“This investment marks a significant step forward for the modernization of our Microelectronics Center, enhancing our national security and American technological leadership,” said Cheryl Paradis, vice president and general manager of FAST Labs at BAE Systems, Inc. “At BAE Systems, we remain committed to driving innovation, developing a highly skilled workforce, and ensuring that the U.S. maintains its edge in the critical aerospace and defense industry.”

“We’re proud to be a part of this effort to revitalize and grow U.S. domestic semiconductor manufacturing capability. This award will help to ensure U.S. leadership in compound semiconductor manufacturing capability while reenforcing Rocket Lab’s position as a leader in space-grade solar cell production,” said Brad Clevenger, Vice President of Rocket Lab Space Systems. “The investment will enable Rocket Lab to expand production, create highly skilled manufacturing jobs and generate economic and workforce development activity in New Mexico.”

As stated in the CHIPS Notice of Funding Opportunity for Commercial Fabrication Facilities, CHIPS for America will distribute direct funding to recipients for capital expenditures based on the completion of construction, production, and commercial milestones. The program will track the performance of each CHIPS Incentives Award via financial and programmatic reports, in accordance with the award terms and conditions.