The Biden administration is unveiling the first allocation of incentives from the bipartisan CHIPS and Science Act passed last year.
The Biden administration unveiled the first of many federal investments in computer chip production on Monday, saying it will provide $35 million to BAE Systems to enhance production at a New Hampshire factory that makes semiconductors for military aircraft such as the F-15 and F-35 fighter jets.
This would be the first round of incentives from last year’s bipartisan CHIPS and Science Act, which gives more than $52 billion to encourage semiconductor development and manufacture in the United States.
The Commerce Department’s selection of a military contractor over a traditional chip producer demonstrates the law’s national security focus, as more and more weapons systems rely on advanced processors that could be important in both averting and fighting wars.
“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,” said Commerce Secretary Gina Raimondo, who described the investments as a “once-in-a-generation opportunity to advance our national and economic security and create a thriving, long-lasting domestic semiconductor manufacturing industry.”
President Joe Biden signed the incentives into law in August 2022, partially in response to concerns that a military attack on Taiwan would deprive the world of modern computer chips, causing the United States to enter a slump.
The coronavirus epidemic exposed the vulnerability of computer chip supplies as a global scarcity curtailed US auto production and drove up costs around the time of Biden’s presidency.
“Over the coming year, the Department of Commerce will award billions more to make more semiconductors in America and invest in research and development capabilities to keep America at the forefront of new technologies,” said Vice President Joe Biden.
Biden also stated that the incentives provided by his administration have already resulted in more than $230 billion in projected investments in semiconductors and electronics.
While in New York, the Democratic president visited a proposed Intel facility in Ohio and a new Taiwan Semiconductor Manufacturing Co. plant in Arizona, as well as lauded IBM investments. Biden has included these financial commitments in his pitch to voters ahead of the 2024 elections, claiming that his policies have revitalized the US economy.
According to government authorities, the investment in the BAE Systems complex will ultimately save taxpayers money. The money paid out as the company meets criteria will help triple the plant’s production capacity, halving the cost of manufacturing the chips and resulting in net savings for federal agencies purchasing the chips.
According to White House National Security Adviser Jake Sullivan, the enhanced capacity will benefit NATO members and partners in Asia as well. However, he emphasized that an enlarged manufacturing base was necessary to protect the United States.
“We do not want to be in a position where critical national security needs are dependent on faulty foreign supply chains,” he said. “We do not want to be in a position where another country can cut us off in a moment of crisis.”
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