BAE Systems To Get $35 Mln To Boost Chips Production For US Defense Programs

The U.S. Department of Commerce has announced a funding of $35 million in federal incentives under the CHIPS and Science Act to support the modernization of BAE Systems’ Microelectronics Center, and to quadruple its production capacity for chips that are essential to the Unite States’ national security, including for use in F-35 fighter jets.

The Department of Commerce and BAE Systems Electronic Systems, a business unit of BAE Systems, Inc., have signed a non-binding preliminary memorandum of terms (PMT). This is the first funding announcement as part of the CHIPS and Science Act, which was designed to strengthen American manufacturing, supply chains, and national security. Modernizing BAE Systems’ microelectronics center helps support this vision and the continued development and manufacturing of cutting-edge technology to serve customers’ missions.

BAE Systems’ MEC in in Nashua, New Hampshire, is an 110,000-square-foot, Department of Defense (DoD)-accredited, semiconductor chip fabrication and foundry facility that produces technology for DoD applications. The MEC develops advanced semiconductor technologies beyond those available commercially to meet demanding military requirements. It is one of the only domestic defense-centric six-inch Gallium Arsenide (GaAs) and Gallium Nitride (GaN) High Electron Mobility Transistor (HEMT) wafer foundries.

“We have been clear since day one that the CHIPS for America Program is about advancing our national security and strengthening domestic supply chains, all while creating good jobs supporting long-term U.S. economic growth. As national security becomes as much about the chips inside of our weapons systems as the weapons systems themselves, this first CHIPS announcement shows how central semiconductors are to our national defense,” said Secretary of Commerce Gina Raimondo.

“Microelectronics are at the heart of the technology and products we make for our defense and aerospace customers—from next-generation aircraft and satellites to military-grade GPS and secure communications,” said Tom Arseneault, president and CEO of BAE Systems, Inc. “This funding will help modernize our Microelectronics Center and fulfill the promise of the CHIPS and Science Act by increasing our capacity to serve national defense programs, growing our technical workforce, and helping to strengthen the nation’s onshore supply chain.

Local and state commitments contributed to the funding application. As a result, both the state of New Hampshire and the City of Nashua are offering workforce incentives through Nashua Community College (NCC).

“This critical funding from the CHIPS and Science Act—which I was proud to help pass—will help BAE Systems’ Microelectronics Center in Nashua modernize their facility and ensure our military continues to have access to American-made semiconductor technology,” said U.S. Senator Jeanne Shaheen, chair of the U.S. Senate Appropriations Subcommittee that funds the Department of Commerce. “These modernization efforts will strengthen New Hampshire’s integral role in the nation’s defense manufacturing industry for years to come.”

The British multinational arms, security and aerospace company said the $35 million in funding will be coupled with the ongoing investment in modernization and R&D. The funding will help purchase new, more efficient manufacturing tools to mitigate supply chain risk, increase production capacity, and reduce time-to-build product. The increased efficiency will enable a scale-up in production to meet increasing demand for DoD technology and provide critical microelectronics to non-defense industries including satellite communications, and test and measurement equipment markets.

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