On Monday, the U.S. Commerce Department said it plans to award $35 million to BAE Systems to quadruple production in New Hampshire for key semiconductor chips used in the F-35 fighter jets and commercial satellites. The grant is the first from the $52.7 billion “Chips for America” semiconductor manufacturing and research subsidy program approved by Congress in August 2022 to ramp up U.S. chip production amid concerns about reliance on Asia. The grant will be used for production, engineering support, and testing of the AN/ASQ-239 electronic warfare hardware baseline upgrade on the F-35 Lightning II fighter aircraft. It will be performed in Nashua, Point Mugu, California, and San Francisco.
The project is part of a massive effort by the Pentagon to improve the F-35’s electronic warfare capabilities. The E.W. systems are intended to give military personnel a superior situational awareness of threats and allow them to detect and take action against them. The company said the new baseline hardware is expected to be available on future Lot 17 F-35s and provide improved discriminating capability.
Other big-name chipmakers such as Intel INTC and Micron Technology M.U. have also submitted applications for the grant funds. TSMC – which owns two huge U.S. chip factories that could receive a combined $100 billion from the grant — has signaled it will also seek funding.
Both companies have made massive domestic commitments to produce more chips despite relying heavily on foreign facilities for manufacturing capacity. Micron, for example, is investing more than $10 billion in a pair of facilities in suburban Syracuse and Saratoga, New York, that it believes will make the company more competitive against fab-rich Asia.
The grants are part of a more significant effort by President Biden to bring more chip production back to the United States to curb its dependence on China. In a speech last month, Biden said that his administration would invest more than $200 billion over the next decade in chip-related projects to create jobs and promote economic growth.
