US Awards $35 million to BAE Systems in first grant under Chips Act

The U.S. Department of Commerce has announced approximately $35 million in initial funding for BAE Systems to modernize the Microelectronics Center (MEC) in Nashua, New Hampshire. This is the first funding announcement as part of the CHIPS and Science Act, which was designed to strengthen American manufacturing, supply chains, and national security. Modernizing BAE Systems’ microelectronics center helps support this vision and the continued development and manufacturing of cutting-edge technology to serve customers’ missions.

BAE Systems’ MEC is an 110,000-square-foot, Department of Defense (DoD)-accredited, semiconductor chip fabrication and foundry facility that produces technology for DoD applications. The MEC develops advanced semiconductor technologies beyond those available commercially to meet demanding military requirements. It is one of the only domestic defense-centric six-inch Gallium Arsenide (GaAs) and Gallium Nitride (GaN) High Electron Mobility Transistor (HEMT) wafer foundries.

“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,” said Tom Arseneault, president and CEO of BAE Systems, Inc. “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. This initiative is the result of a strong partnership with federal, state, and local government.”

“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. 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,” said U.S. Secretary of Commerce Gina Raimondo. “Thanks to President Biden’s Investing in America Agenda, we have reached preliminary terms to make a substantial investment in New Hampshire’s expanding defense industrial base, which will help make our country and supply chains more secure and bolster the economy of the Granite State.”

Local and state commitments contributed to the funding application. As a result, both the state of New Hampshire and the City of Nashua are offering workforce incentives through Nashua Community College (NCC). The state of New Hampshire will provide tuition assistance for NCC’s microelectronics bootcamp and the Nashua City Council is providing funds to establish a new clean room training course at NCC.

“This critical funding from the CHIPS and Science Act—which I was proud to help pass—will help BAE Systems’ Microelectronics Center in Nashua modernize their facility and ensure our military continues to have access to American-made semiconductor technology,” said U.S. Senator Jeanne Shaheen, chair of the U.S. Senate Appropriations Subcommittee that funds the Department of Commerce. “These modernization efforts will strengthen New Hampshire’s integral role in the nation’s defense manufacturing industry for years to come.”

“New Hampshire is a hub for innovation-based businesses and entrepreneurs,” said U.S. Senator Maggie Hassan. “We worked to pass the CHIPS and Science Act to build a stronger economy and protect our national security, and the agreement announced today on modernizing BAE Systems' Microelectronics Center in Nashua is a yet another way this law will ensure that the United States remains a global leader in advanced technology.”

“I’m thrilled to see these resources from the CHIPS and Science Act heading to BAE Systems in Nashua,” said Congresswoman Annie Kuster. “When we passed this legislation in 2022, this is exactly the kind of project we envisioned. I look forward to seeing the modernized Microelectronics Center and the positive impact it will have on our state, our economy, and our national security.”

“I’m thrilled BAE Systems has received this funding to modernize their microelectronics facility,” said Congressman Chris Pappas. “On-shoring our production of semiconductors and new investments in technology development strengthen our national defense, all while creating good paying jobs in New Hampshire’s growing tech industry. I remain committed to supporting our local manufacturers and workforce so that New Hampshire remains a great place to live and work.”

“Our world-class high-tech manufacturers located here in New Hampshire help lead one of the most vibrant state economies in the country,” said New Hampshire Department of Business and Economic Affairs (BEA) Commissioner Taylor Caswell. “Not only is BAE Systems an international powerhouse and our largest employer in this space, but they are also a true team player right here in New Hampshire. I could not be happier for them to be recognized by the Department of Commerce through this impressive funding.”

“I believe BAE Systems’ project is exactly why the CHIPS Act was enacted. The CHIPS Act provides funding we can leverage to create good high-paying jobs within the semiconductor industry,” said Jim Donchess, Mayor of Nashua, New Hampshire. “Thank you to Lucille Jordan at the Nashua Community College for partnering with BAE Systems to implement a workforce-training program within this burgeoning industry. I am grateful to our Federal Congressional delegation for their leadership on this project and Nashua’s Board of Aldermen for committing local funding to help bring this project to fruition.”

The approximately $35 million in funding will be coupled with ongoing investment in modernization and R&D by BAE Systems. The funding will help purchase new, more efficient manufacturing tools to mitigate supply chain risk, increase production capacity, and reduce time-to-build product. The increased efficiency will enable a scale-up in production to meet increasing demand for DoD technology and provide critical microelectronics to non-defense industries including satellite communications, and test and measurement equipment markets.