The Biden administration will give the first grant funded by a law designed to fund semiconductor manufacturing and expansion to the makers of chips used in F-15 and F-35 fighter jets.
The government will give a $35 million grant to BAE Systems, a defense contractor that provides components to the military, according to the New York Times. The grant will help BAE stabilize its ability to create the chips within the United States. It is the first grant to be released as part of the 2022 CHIPS and Science Act, legislation that provided $280 billion in funding, including $52 billion for new semiconductor factories in the U.S., meant to encourage domestic tech development in an effort to outcompete China.
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“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,” Commerce Secretary Gina Raimondo told reporters on Sunday.
BAE’s chips are currently made in the U.S., but the grant will allow the company to upgrade old machinery to protect the company’s operations. The grant money will be released over time after the Commerce Department ensures that the project and the company reach specific goals and that BAE does not use the funding to improve its profit margins.
Lockheed Martin uses the affected chips to create “monolithic microwave integrated circuits,” which make high-frequency radio waves and are used for aircraft-to-aircraft communications.
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BAE’s grant is the “first of many announcements,” Raimondo said, and several other awarded grants will be released in the first half of 2024.
The CHIPS Act is just one of the government’s efforts to use industrial policy in an effort to gain an edge on China. The U.S. also implements multiple export controls to restrict the Chinese military and economy from accessing the necessary components to expand AI and quantum computing abilities.
