
In a groundbreaking move set to ignite the semiconductor industry, the Biden administration is on the brink of finalizing a jaw-dropping $35 million deal with BAE Systems.
This colossal funding, marking the first award from President Biden’s celebrated CHIPS and Science Act of 2022, is aimed at turbocharging BAE Systems’ U.S. semiconductor manufacturing – a critical pivot towards bolstering national defense and reviving the nation’s tech prowess.
Commerce Secretary Gina Raimondo announced, “This is the first of many,” indicating that this is just the tip of the iceberg in a $50 billion master plan to resurrect America’s semiconductor sector.
The stage is set for Raimondo to visit BAE’s New Hampshire facility on Monday for the official announcement, a move that will underscore the administration’s strategic focus on the nexus between cutting-edge semiconductors and national security.
This development is not just about funding; it’s a strategic play in the global tech game.
National Security Advisor Jake Sullivan emphasized the pivotal role of semiconductors in America’s defense systems, highlighting that essential military equipment like the Javelin weapons system is critically dependent on these chips. Sullivan hailed the announcement as “especially meaningful from a national security perspective.”
BAE Systems, a major player in the defense sector with its U.S. base in Falls Church, Va., is poised to receive a massive boost to its chip-making capacity.
The funding is primarily targeted at the company’s Nashua, N.H. plant, which is instrumental in the production of critical components for defense programs like the Pentagon’s F-35 fighter jet.
BAE’s U.S. CEO, Tom Arseneault, expressed that this influx of funds will not only modernize their Microelectronics Center but also fortify the nation’s defense supply chain and expand the workforce.
While the excitement builds around BAE Systems, other industry giants like Intel, Micron, IBM, and TSMC are eagerly awaiting their piece of the pie, with the formalization of their awards anticipated in early 2024.
The CHIPS and Science Act has been a magnet for intense lobbying, with about $50 billion earmarked for the semiconductor sector.
The administration is treading cautiously, ensuring each agreement is meticulously tailored to the applicant’s needs.
Raimondo underscored the bespoke nature of these negotiations, highlighting the administration’s commitment to reversing the decades-long decline of the U.S. semiconductor industry.
The U.S., once a global leader in this domain, has seen its market share plummet from 40% in 1990 to a mere 12% in recent years.
Monday’s announcement is more than just a financial boost; it’s a strategic move to reduce America’s reliance on overseas chipmaker facilities, primarily concentrated in Southeast Asia.
With this bold step, the Biden administration signals its determination to reclaim America’s spot as a global leader in technology and national defense.