Biden administration says New Hampshire computer chip plant the first to get funding from CHIPS law

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The Biden administration has announced a significant financial allocation of $35 million to BAE Systems for the purpose of expanding production at a computer chip manufacturing facility in New Hampshire. This facility specializes in the production of computer chips designed for military applications, including use in advanced military aircraft such as the F-15 and F-35 jets.

This allocation of funds marks a pivotal development as it represents the first disbursement of incentives provided under the bipartisan CHIPS and Science Act, which was enacted last year. This comprehensive legislation has earmarked over $52 billion to bolster the development and manufacturing of semiconductor technology within the United States.

The selection of a military contractor, BAE Systems, for this investment underscores the national security-oriented objectives of the CHIPS law. It reflects the recognition that modern weapons systems increasingly rely on advanced semiconductor chips, which hold the potential to play a critical role in both the prevention and engagement of conflicts.

President Joe Biden signed this legislation into law in August 2022, driven in part by concerns that a potential military conflict involving Taiwan could disrupt the global supply of advanced computer chips, potentially leading to a recession in the United States.

Commerce Secretary Gina Raimondo emphasized the importance of diversifying sources of advanced technologies, stating, “We can’t gamble with our national security by depending solely on one part of the world or even one country for crucial advanced technologies.” She views these investments as a unique opportunity to bolster both national security and economic interests while nurturing a sustainable domestic semiconductor manufacturing industry.

The COVID-19 pandemic had previously exposed the vulnerability of global computer chip supply chains, leading to shortages that impacted various industries, including automotive production in the United States, contributing to supply disruptions and price increases early in President Biden’s tenure.

The administration’s incentives have already attracted more than $230 billion in planned investments within the semiconductor and electronics sectors. President Biden has actively visited and promoted various manufacturing facilities, such as Intel in Ohio, Taiwan Semiconductor Manufacturing Co. in Arizona, and IBM investments in New York, using these commitments to bolster his economic policies and appeal to voters in anticipation of the 2024 elections.

In a statement, President Biden affirmed the commitment to further investment, stating, “Over the coming year, the Department of Commerce will award billions more to make more semiconductors in America, invest in research and development capabilities to keep America at the forefront of new technologies.”

Government officials highlight that the investment in BAE Systems’ facility will ultimately result in cost savings for taxpayers. As the company meets specified benchmarks, the funding will enable a fourfold increase in the plant’s production capacity, effectively reducing the cost of chip manufacturing by half and generating overall savings for federal agencies procuring these chips.

White House national security adviser Jake Sullivan emphasized that the benefits of this increased capacity extend beyond the United States, benefiting NATO allies and partners in Asia. However, he underscored the critical importance of expanding the domestic manufacturing base to safeguard U.S. national security interests, ensuring that critical needs are not contingent on vulnerable foreign supply chains, especially during moments of crisis.

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More about Semiconductor Investment

• CHIPS and Science Act
• BAE Systems
• F-15 and F-35 jets
• President Joe Biden
• Commerce Secretary Gina Raimondo
• COVID-19 pandemic impact on chip supply
• Intel manufacturing facility in Ohio
• Taiwan Semiconductor Manufacturing Co.
• IBM investments in New York
• White House national security adviser Jake Sullivan