Semiconductor Equipment

First CHIPS Act funding released to defense contractor

14 December 2023

The first CHIPS and Science Act funding has been released by the U.S. Department of Commerce to BAE Systems Electronic Systems. The $35 million federal incentive will be used to modernize BAE’s microelectronics center in Nashua, New Hampshire, to replace aging tools.

The funding will also be used to quadruple the production of chips needed for defense programs like the F-35 fighter jet.

BAE Systems said the initiative will help in growing its technical workforce, shore up its national defense program and help work with federal, state and local governments.

Why it matters

The release of federal incentives marks a huge turn in the implementation of the CHIPS and Science Act, which was signed into law in August of 2022 by U.S. President Biden.

Since its inception, the CHIPS Act has been used by semiconductor vendors and other companies in the chip supply chain to urge the rebuilding of America’s domestic semiconductor manufacturing industry.

The U.S. Department of Commerce said it has received more than 460 statements of interest across 42 states with proposals from companies looking to manufacture semiconductors. These projects will create more than 40,000 jobs in the semiconductor supply chain ecosystem and support hundreds of indirect jobs. More than $200 billion in investments into the domestic supply chain have already been announced with hopes of getting CHIPS Act funding.

Some of the companies seeking federal incentives from the CHIPS Act include:

  • Intel
  • Micron
  • Globalfoundries
  • Samsung
  • TSMC
  • Texas Instruments
  • Skywater
  • Wolfspeed

“Today’s announcement represents an important milestone on the path to fulfilling the tremendous promise of the CHIPS and Science Act and reinforcing America’s national security, critical supply chains, and the economy,” said John Neuffer, president and CEO of the Semiconductor Industry Association (SIA). “We applaud Secretary Raimondo and the CHIPS Program Office team for working diligently to begin getting CHIPS incentives out the door.”

The SIA said it looks forward to seeing additional project being granted federal incentives to continue America’s re-investment in semiconductor production and innovation for the future. President Biden said the U.S. Department of Commerce will hand out billions more in the coming months and years to boost R&D and build new semiconductor fabs in the U.S.

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