BAE Secures $35 Million in US Chips Act Funding

BAE Systems, a leading defense contractor, has been awarded $35 million in funding from the US Chips Act to modernize its Microelectronics Centre in Nashua, New Hampshire. The facility, which specializes in mature-node production, will use the funds to replace aging tools and significantly increase chip production for critical defense programs, including the F-35 fighter jet program.

The agreement between BAE Systems and the Department marks an important milestone in the implementation of the US CHIPS and Science Act. The Act aims to strengthen domestic supply chains and enhance national security by investing in semiconductor technology.

Commerce Secretary Gina Raimondo emphasized the significance of the funding, stating, "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."

BAE Systems CEO Tom Arseneault expressed his gratitude for the funding, stating, "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."

The funding was secured through a preliminary memorandum of terms (PMT), which is offered to applicants on a non-binding basis after a thorough merit review of their full application. The PMT outlines the key terms for a CHIPS incentives award, including the amount and form of the award.

Following the signing of the PMT, the Department conducts a comprehensive due diligence process to evaluate the proposed project and other information provided in the application. Once the due diligence phase is satisfactorily completed, the Department may proceed with final award documents, which are subject to negotiations with the applicant and may differ from the terms outlined in the PMT.