The Department of Commerce is mounting a late burst of activity to finalize investments under the CHIPS and Science Act before President-elect Donald Trump – who has criticized the program in recent weeks – takes office in January.
The agency announced this week that it has finalized two separate awards for BAE Systems Electronic Systems and Rocket Lab under the CHIPS Incentives Program’s Funding Opportunity for Commercial Fabrication Facilities.
President Biden signed the CHIPS and Science Act into law in August 2022, making up to $52 billion of funding available to incentivize semiconductor makers to establish new manufacturing operations in the United States.
The finalized awards come after the Commerce Department’s preliminary agreements with the two companies – BAE Systems received the inaugural preliminary agreement for up to $35 million in December 2023 and Rocket Lab inked its own agreement for up to $23.9 million in June of this year.
“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 (NIST) Director Laurie Locascio. “By finalizing these awards, we are strengthening America’s domestic semiconductor supply chain resilience and broadening our manufacturing capabilities.”
BAE Systems will use its award to support the modernization of its Microelectronics Center in Nashua, N.H. The money will allow the company to quadruple its output of chips necessary for defense programs, including for the F-35 fighter jet program.
Rocket Lab – which is headquartered in Albuquerque, N.M. – will use the award to expand the production of compound semiconductors that power spacecrafts and satellites. The funding will help the company increase its compound semiconductor production by 50 percent within the next three years.
Commerce Proposes Additional CHIPS Investments
Within the past week, the Commerce Department also proposed two additional investments under the CHIPS and Science Act – the first of which would invest up to $300 million in advanced packaging research projects in Georgia, California, and Arizona.
The agency said the expected recipients are Absolics Inc. in Georgia, Applied Materials Inc. in California, and Arizona State University in Arizona. The up to $300 million in Federal funding will also be paired with additional investments from the private sector, bringing the expected total investment across all three projects to over $470 million.
The second proposed investment from the Commerce Department is to provide the Semiconductor Research Corporation Manufacturing Consortium Corporation (SRC) with $285 million to establish and operate a Manufacturing USA institute headquartered in Durham, N.C.
With the combined funding totaling $1 billion, this investment will support the launch of the first-of-its-kind CHIPS Manufacturing USA Institute.
The Commerce Department said the new institute will be called SMART USA (Semiconductor Manufacturing and Advanced Research with Twins USA), and it will use digital twins approaches to greatly speed the development and validation of next-generation semiconductor manufacturing, advanced packaging, assembly, and test processes.
NIST first announced its plans for the CHIPS Manufacturing USA institute in May through a notice of funding opportunity. In selecting SRC this week, the Commerce Department said the company is “an important part of North Carolina’s research ecosystem, including decades-long relationships with North Carolina’s universities.”
