WASHINGTON – BAE Systems' New Hampshire-based operations will receive a $35 million grant to quadruple its production of a chip used in F-15 and F-35 fighter jets in the first CHIPS Act funds to be distributed by the US Department of Commerce.

The award is the first of several expected in the coming months, as the Commerce Department begins distributing the $39 billion in federal funding that Congress authorized under the 2022 CHIPS and Science Act. The money is intended to incentivize the construction of chip factories in the United States and lure back a key type of manufacturing that has slipped offshore in recent decades.

Commerce Secretary Gina Raimondo said that the decision to select a defense contractor for the first award, rather than a commercial semiconductor facility, was meant to emphasize the administration’s focus on national security.

"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," she said in a statement. "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."

SEMI and SIA both released statements applauding the first distribution of funding from the CHIPS Act.

"Today’s announcement represents an important milestone on the path to fulfilling the tremendous promise of the CHIPS and Science Act and reinforcing America’s national security, critical supply chains, and the economy," said SIA President and CEO John Neuffer. We applaud Secretary Raimondo and the CHIPS Program Office team for working diligently to begin getting CHIPS incentives out the door. We look forward to additional projects being funded and stand ready to continue working with Commerce Department leaders to ensure the CHIPS and Science Act reinvigorates U.S. semiconductor production and innovation for years to come."

"We commend the thoughtful approach the US Department of Commerce has taken in awarding incentives and are pleased to see the advancement of incentives to bolster the resiliency of the domestic semiconductor supply chain," said Joe Stockunas, president, SEMI Americas. "In order for the global semiconductor industry to support the push for digitalization and a diverse range of smart applications over the coming years, we must go beyond elevating just one facet of the supply chain and pursue a fortified ecosystem encompassing equipment, materials and advanced packaging. SEMI has advocated with the US Chips Program Office to distribute incentives with this goal in mind, and we are confident in their understanding of the industry’s needs."

The CHIPS and Science Act provides a 25% tax credit for US facilities that produce semiconductors or chipmaking equipment and $52 billion in funding for new or updated semiconductor-related manufacturing programs. The funding includes $39 billion for grants available to semiconductor manufacturers as well as equipment and materials suppliers and $11 billion for federal semiconductor research programs.

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