BAE Systems, the American subsidiary of British aerospace firm BAE Systems, has been selected as the inaugural recipient of a federal grant under the recently enacted CHIPS and Science Act. The grant, totaling $35 million, aims to fortify domestic semiconductor manufacturing, with a specific focus on quadrupling the production of crucial chips utilized in cutting-edge defense systems, including F-15 and F-35 fighter jets.
The CHIPS and Science Act, greenlit by Congress in 2022, earmarked a substantial $39 billion in federal funding to incentivize the construction of semiconductor factories within the United States. The Biden administration’s decision to grant BAE Systems the first award underscores its commitment to bolstering national security by shoring up the semiconductor supply chain.
Commerce Secretary Gina Raimondo, officially announced the grant, emphasizing its significance in addressing the “dangerous reliance” on a handful of Asian countries for critical semiconductors. The BAE grant serves as a strategic step in reducing dependency on external sources for sophisticated chips vital to military equipment.
BAE Systems, situated in Nashua, New Hampshire, will employ the $35 million grant to upgrade machinery, enhance efficiency, and decrease chip production costs. As part of the grant agreement, BAE has committed to workforce training programs, fostering initiatives at local community colleges to equip the labor force with the necessary skills.
Looking ahead, Secretary Raimondo anticipates the announcement of 10 to 12 additional grants within the next year, with a broader focus on advancing chip-making facilities in the U.S. The Chips and Science Act, with its $39 billion in direct grants and $75 billion in loans and loan guarantees, has catalyzed over $230 billion in private semiconductor investments, involving major industry players such as TSMC, Intel, Micron Technology, and Samsung Electronics.
This strategic initiative not only addresses national security concerns but also positions the United States as a key player in the global tech battleground. As more than 550 firms express interest and negotiations with companies globally intensify, the CHIPS and Science Act appears poised to reinvigorate the U.S. semiconductor industry, with questions lingering about the long-term sustainability of these investments.
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