The U.S. Department of Commerce has come to a preliminary agreement with Rocket Lab to provide up to $23.9 million in direct funding through the CHIPS and Science Act.
The investment would allow the company to increase its production of compound semiconductors for spacecraft and satellites. Additionally, the funding will fund an expansion and modernization of Rocket Lab’s facility in Albuquerque, New Mexico.
This expansion and modernization will help increase its production of compound chips by 50% in the next three years, Rocket Lab said.
Rocket Lab is the 10th company to receive direct funding through the CHIPS Act, a bill that was signed in 2022 by President Joe Biden to expand U.S. domestic semiconductor manufacturing, increase R&D into microchips and increase funding for advanced packaging and other back-end technologies. Last month Absolics received $75 million through the act to expand its glass substrates. Other vendors that have received direct funding through the CHIPS Act include Intel, Micron, Microchip, TSMC, Samsung, GlobalFoundries and more.
Space-grade solar cells
Rocket Lab acquired SolAero Technologies in 2022. This made Rocket Lab just one of two vendors domestically that specializes in the production of radiation resistant compound semiconductors called space-grade solar cells. Three other companies develop these chips but are in Russia and China.
Rocket Labs’ solar cells are produced in its Albuquerque fab and power space programs like:
- Missile awareness systems
- James Webb Space Telescope
- NASA’s Artemis lunar explorations
- Ingenuity Mars Helicopter
- Mars Insight Lander
Additionally, the vendor’s technology is used in commercial satellites like the OneWeb broadband internet satellite constellation.
Given their use in national security and exploration systems in space, the CHIPS Act investment would help to create a more robust and resilient supply of these space-grade solar cells, the DOC said. The investment will help to meet the growing consumer and government demand for these solar cells.
Why it matters
The direct funding in Rocket Lab will create more than 100 direct manufacturing jobs domestically. Along with the direct funding from the DOC, New Mexico will also commit financial assistance and incentives bringing the total investment to $25.5 million.
"Semiconductors are central to modern life, to our economy and to America's future,” said Peter Beck, founder and CEO of Rocket Lab. "For more than two decades the SolAero team, now part of Rocket Lab, has played a crucial role in the domestic production of semiconductors. This program is a continuation of our commitment to ensuring resilient U.S. supply chains and creating highly productive local jobs."
Domestic semiconductor manufacturing and technology has grown in importance since the outbreak of the COVID-19 pandemic. The U.S. government, trade organizations and companies realized the potential to grow revenues but also secure a supply of semiconductors domestically.
The idea is if a future pandemic occurs or a geopolitical event happens that impacts the semiconductor supply chain, regionally the U.S. will be more secure and resilient. The CHIPS Act was created to invest in both domestic and foreign companies to build new chip fabs or expand existing fabs on U.S. soil.
So far, the CHIPS Act has doled out about $33 billion to companies and about $6 billion is left, which is expected to be given to smaller companies that are working on technologies like Rocket Lab and Polar Semiconductor, which was given $120 million to transform the company into a U.S.-based chip foundry.
