By David Shepardson
WASHINGTON (Reuters) – The U.S. Commerce Department said on Monday it is finalizing nearly $60 million in government subsidies for BAE Systems to build chips used in jets and satellites, and for Rocket Lab to build compound semiconductors used in satellites and spacecraft.
The department is finalizing $35.5 million to BAE to quadruple production in New Hampshire for key semiconductor chips used in F-35 fighter jets and commercial satellites. The investment will cut the company’s planned modernization timeline in half, Commerce said.
The Pentagon plans to spend $1.7 trillion on the F-35 program including buying 2,500 planes in the coming decades. The chips are critical to F-15s and F-35s.
The Commerce Department is also finalizing $23.9 million for Rocket Lab unit SolAero Technologies Corp, which the government said would boost the company’s production of solar cells by 50% over the next three years.
Rocket Lab, founded in 2006 by New Zealander Peter Beck, is one of two U.S. firms specializing in the production of highly efficient, radiation resistant compound semiconductors called space-grade solar cells.
The company’s solar cells support U.S. space programs, including missile awareness systems, the James Webb Space Telescope, NASA’s Artemis lunar explorations, Ingenuity Mars Helicopter, and Mars Insight Lander.
Commerce Secretary Gina Raimondo told Reuters this month the department is racing to complete as many agreements as possible under the Biden administration’s $52.7 billion “Chips and Science” program before President-elect Donald Trump, who criticized the program, takes office on Jan. 20.
Commerce earlier this month finalized its first major award – a $6.6 billion subsidy for Taiwan Semiconductor Manufacturing Co’s U.S. unit.
Last week, Commerce finalized a $1.5 billion subsidy for GlobalFoundries to expand semiconductor production in Malta, New York and Vermont.
(Reporting by David Shepardson; Editing by Sonali Paul)