Early last week, the U.S. Department of Commerce announced four awards totaling nearly $8 billion under the CHIPS Incentives Program’s Funding Opportunity for Commercial Fabrication Facilities. The awards will support Intel investments in Arizona, New Mexico, Ohio, and Oregon; BAE Systems’ New Hampshire investment; and Rocket Lab’s New Mexico expansion.
First, Intel Corporation was awarded up to $7.865 billion in direct funding from the program. The award follows the previously signed preliminary memorandum of terms, announced in March, and the completion of due diligence. It will directly support Intel’s expected U.S. investment of nearly $90 billion by the end of the decade, which is part of the company’s overall $100+ billion expansion plan. Commerce will disburse the funds based on Intel’s completion of project milestones.
“The CHIPS for America program will supercharge American innovation and technology and make our country more secure – and Intel is playing an important role in the revitalization of the U.S. semiconductor industry through its unprecedented investments across Arizona, New Mexico, Ohio, and Oregon,” said U.S. Secretary of Commerce Gina Raimondo. “Thanks to the leadership of President Biden and Vice President Harris, our CHIPS award is enabling Intel to drive one of the most significant semiconductor manufacturing expansions in U.S. history.”
Intel’s process technologies, such as Intel 18A and advanced packaging technologies, combined with its foundry services, will strengthen the domestic supply of advanced chips that power the most sophisticated technology on the planet, including developing AI and building critical military capabilities. Commerce’s investment in Intel supports both the fabrication and advanced packaging of leading-edge chips through projects in Chandler, Arizona; Rio Rancho, Mexico; New Albany, Ohio; and Hillsboro, Oregon. Intel’s overall expansion plan is estimated to support approximately 10,000 manufacturing jobs and 20,000 construction jobs across all four states.
“With Intel 3 already in high-volume production and Intel 18A set to follow next year, leading-edge semiconductors are once again being made on American soil,” said Pat Gelsinger, CEO of Intel. “Strong bipartisan support for restoring American technology and manufacturing leadership is driving historic investments that are critical to the country’s long-term economic growth and national security. Intel is deeply committed to advancing these shared priorities as we further expand our U.S. operations over the next several years.”
CHIPS Incentives Awards Support U.S. National Security, Space Industry
Just a day earlier, Commerce finalized two separate awards under the CHIPS Incentives Program’s Funding Opportunity for Commercial Fabrication Facilities. BAE Systems Electronic Systems, a business unit of BAE Systems, Inc.,was awarded up to $35.5 million in direct funding, while Rocket Lab, the parent company of space power provider SolAero Technologies Corp., was awarded up to $23.9 million in direct funding. The awards come after the previously signed preliminary memoranda of terms, announced in December 2023 and June 2024, respectively, and completion of due diligence. Commerce 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 (NIST) 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.”
These awards will support the following projects:
- BAE Systems, Inc.: The up to $35.5 million award will support the modernization of the company’s Microelectronics Center in Nashua, NH, 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.
- Rocket Lab: This up to $23.9 million award 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 U.S. 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 funding will support the modernization and expansion of Rocket Lab’s facility in Albuquerque, NM, which will increase the company’s compound semiconductor production by 50% within the next three years – helping to meet growing national security and commercial demand for these solar cells in the U.S. The investment is expected to create over 100 direct jobs.
“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.”
