News & Analysis

US announces first CHIPS grant goes to BAE Systems

5th January 2024
Paige West

The US Department of Commerce has allocated $35 million in initial funding to BAE Systems for the modernisation of their Microelectronics Centre (MEC) in Nashua, New Hampshire.

This funding, part of the CHIPS and Science Act, aims to reinforce American manufacturing, supply chains, and national security. The upgrade of BAE Systems’ microelectronics centre aligns with these goals, fostering the development and manufacturing of advanced technology for customer missions.

BAE Systems’ MEC, a 110,000-square-foot facility accredited by the Department of Defense (DoD), specialises in semiconductor chip fabrication and foundry services. It produces technology specifically for DoD applications and develops advanced semiconductor technologies that exceed commercial availability, particularly in six-inch Gallium Arsenide (GaAs) and Gallium Nitride (GaN) High Electron Mobility Transistor (HEMT) wafer foundries.

Tom Arseneault, President and CEO of BAE Systems, Inc., said: “Microelectronics are at the heart of the technology and products we make for our defence and aerospace customers – from next-generation aircraft and satellites to military-grade GPS and secure communications. This funding will help modernise our Microelectronics Centre and fulfil the promise of the CHIPS and Science Act by increasing our capacity to serve national defence programs, growing our technical workforce, and helping to strengthen the nation’s onshore supply chain. This initiative is the result of a strong partnership with federal, state, and local government.”

US Secretary of Commerce Gina Raimondo stated: “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 US 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 defence. Thanks to President Biden’s Investing in America Agenda, we have reached preliminary terms to make a substantial investment in New Hampshire’s expanding defence industrial base, which will help make our country and supply chains more secure and bolster the economy of the Granite State.”

The funding was secured with support from local and state governments, including workforce incentives from Nashua Community College (NCC) offered by the state of New Hampshire and the Nashua City Council.

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

US Senator Maggie Hassan commented: “New Hampshire is a hub for innovation-based businesses and entrepreneurs. We worked to pass the CHIPS and Science Act to build a stronger economy and protect our national security, and the agreement announced today on modernising BAE Systems' Microelectronics Centre in Nashua is yet another way this law will ensure that the United States remains a global leader in advanced technology.”

Congresswoman Annie Kuster stated: “I’m thrilled to see these resources from the CHIPS and Science Act heading to BAE Systems in Nashua. When we passed this legislation in 2022, this is exactly the kind of project we envisioned. I look forward to seeing the modernised Microelectronics Centre and the positive impact it will have on our state, our economy, and our national security.”

Congressman Chris Pappas said: “I’m thrilled BAE Systems has received this funding to modernise their microelectronics facility. On-shoring our production of semiconductors and new investments in technology development strengthen our national defence, all while creating good paying jobs in New Hampshire’s growing tech industry. I remain committed to supporting our local manufacturers and workforce so that New Hampshire remains a great place to live and work.”

Taylor Caswell, New Hampshire Department of Business and Economic Affairs (BEA) Commissioner, said: “Our world-class high-tech manufacturers located here in New Hampshire help lead one of the most vibrant state economies in the country. Not only is BAE Systems an international powerhouse and our largest employer in this space, but they are also a true team player right here in New Hampshire. I could not be happier for them to be recognised by the Department of Commerce through this impressive funding.”

Jim Donchess, Mayor of Nashua, New Hampshire, commented: “I believe BAE Systems’ project is exactly why the CHIPS Act was enacted. The CHIPS Act provides funding we can leverage to create good high-paying jobs within the semiconductor industry. Thank you to Lucille Jordan at the Nashua Community College for partnering with BAE Systems to implement a workforce-training program within this burgeoning industry. I am grateful to our Federal Congressional delegation for their leadership on this project and Nashua’s Board of Aldermen for committing local funding to help bring this project to fruition.”

The approximately $35 million funding, coupled with BAE Systems’ ongoing investment in modernisation and R&D, will enhance the manufacturing efficiency at MEC. This initiative aims to mitigate supply chain risks, increase production capacity, and shorten product build time. The efficiency gains will enable an increase in production to meet the growing demand for DoD technology and supply critical microelectronics to other industries, including satellite communications and test and measurement equipment markets.

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