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The
announcement is the first from the $52.7 billion "Chips for
America" semiconductor manufacturing and research subsidy
program approved by Congress in August 2022 to ramp up U.S.
chips production amid concerns about reliance on Asia.
President Joe Biden said in a statement "over the coming year,
the Department of Commerce will award billions more to make more
semiconductors in America" and boost research and development.
The department said it signed a non-binding preliminary
memorandum of terms to provide $35 million to BAE Systems
Electronic Systems, a unit of BAE Systems, to support
modernizing the company’s Nashua, New Hampshire Microelectronics
Center.
The Pentagon plans to spend $1.7 trillion on the F-35 program
including buying 2,500 planes in the coming decades. White House
National Security Adviser Jake Sullivan said the chips were
critical to F-15s and F-35s.
"We do not want to be in a position where another country can
cut us off in a moment of crisis," Sullivan told reporters.
The Commerce Department in September issued rules to prevent
chip subsidies from being used by China and moved in October to
halt shipments to China of advanced artificial intelligence
chips.
Companies like Intel, Micron, GlobalFoundries are among those
seeking significant funding from the chip program.
Commerce Secretary Gina Raimondo said the BAE award "is the
first of many announcements. We expect the pace of these
announcements to accelerate in the first half of next year."
The New Hampshire project will reduce the price of future chips
by half, more than offsetting the $35 million cost, an
administration official said.
The chips are used for electronic warfare systems in battle
environments for F-35s built by Lockheed Martin.
The first chip award underscores the program "is about national
security," Raimondo said, adding the aim is create "a thriving
long-lasting domestic semiconductor manufacturing industry."
BAE Systems CEO Tom Arseneault said in a statement funding would
boost its microelectronics which are key to "defense and
aerospace customers -- from next-generation aircraft and
satellites to military-grade GPS and secure communications."
(Reporting by David Shepardson; Editing by Kim Coghill)
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