Commerce Secretary Gina Raimondo speaks at the Biden administration's Investing in America tour at the White House on June 26. She commented on a $35 million deal with BAE for chip manufacturing on Monday. File Photo by Rod Lamkey/UPI | License Photo
Dec. 11 (UPI) -- The Commerce Department announced Monday about $35 million in federal incentives awarded to a BAE Systems facility in New Hampshire to boost the production of chips needed for defense programs, including the F-35 fighter jet program.
The incentives deal with the business unit of BAE Systems, Inc., was made through a non-binding preliminary memorandum under the CHIPS and Science Act to support the modernization of the BAE's Microelectronics Center, in Nashua, N.H.
The company will replace aging tools and make improvements that will quadruple their chip production, the Commerce Department said.
President Joe Biden said the deal, the first under the CHIPS and Science Act, marked a "key milestone" for the legislation.
"Today's announcement is the first step of many to come," Biden said "Over the coming year, the Department of Commerce will award billions more to make more semiconductors in America, invest in research and development capabilities to keep America at the forefront of new technologies, strengthen our national security, and create good-paying jobs."
Secretary of Commerce Gina Raimondo said the BAE deal has as much to do with protecting national security as it does with returning the manufacturing of key computer chips to the United States.
"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," Raimondo said.
Biden said the deal hopes to address the current chipmaking disparity, that threatens the country's technology edge, noting that 10% of the world's computer chips are made domestically, down from 40%.
"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," Tom Arseneault, president and CEO of BAE Systems, Inc., said.
"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."