BAE Systems and Rocket Lab Receive CHIPS Incentives Awards to Make Chips for U.S. National Security and Space Industry

The U.S. Department of Commerce has chosen BAE Systems, Inc., and Rocket Lab to each receive a CHIPS Incentive Award, the funds of which will go towards the development of advanced semiconductor chips to be used in national security and the space industry. 

The Electronics Systems business unit of Bae Systems unit will be provided with up to $35.5 million, while Rocket Lab will be allocated up to $23.9 million.

BAE Systems, Rocket Lab Awarded

Announced on November 25, 2024, the two companies will receive direct funding under the CHIPS Incentives Program’s Funding Opportunity for Commercial Fabrication Facilities. 

Preliminary memoranda of terms were signed in December 2023 and June 2024, and the funds will be disbursed upon completion of certain production and construction milestones, which will be closely monitored.

BAE Systems Fund Allocations

With the CHIPS funding, BAE Systems plans to update its New Hampshire Microelectronics Center, a U.S. Department of Defense Trusted Foundry, after which, the facility will be able to increase its production capacity fourfold. 

The investment will allow the company to expedite this modernization so it can start making Monolithic Microwave Integrated Circuit chips for advanced military aircraft and commercial satellite systems. 

Rocket Lab’s Plans

With its allocated $23.9 million, Rocket Lab will develop radiation-resistant compound semiconductors (space-grade solar cells), which convert light to electricity to power satellites and spacecraft. 

But first, it will expand and modernize its Albuquerque, NM, facility, something that will increase its production capacity over the next three years by 50%. As a result, over 100 new jobs will also be created. 

CHIPS for America

Signed into law by the Biden-Harris Administration in August 2022, the CHIPS and Science Act was designed to strengthen domestic semiconductor production, to not only support the country’s economy, but also provide a technological advantage over leading competitors—particularly China.

Of the $36 billion in proposed incentives, over $10 billion has already been handed out by the government, but it has also encouraged private investors to funnel more than $400 billion into the project. To learn more about what has been done since its inception, read our article: The CHIPS & Science Act: 2 Years Later.

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