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First CHIPS Award Announced

Defense contractor BAE Systems is the first recipient of federal funding from the 2022 CHIPS and Science Act, The New York Times (subscription) reports.

What’s going on: “The company is expected to receive a $35 million grant to quadruple its domestic production of a type of chip used in F-15 and F-35 fighter jets, as well as satellites and other defense systems. The grant is intended to help ensure a more secure supply of a component that is critical for the United States and its allies.”

  • The funds going to BAE Systems are the first of approximately 10 to 12 awards that will be announced within the next year, Commerce Secretary Gina Raimondo said.
  • The CHIPS Act authorized $39 billion to the private sector to construct semiconductor factories in the U.S. 

Why it’s important: The U.S.—which made the first semiconductors but now only manufactures about a tenth of the global supply—has “become ‘dangerously reliant’ on a few countries in Asia for its chips, including technology that goes into military systems,” Raimondo said.

  • “A global shortage of chips during the pandemic shuttered car factories and dented the U.S. economy, highlighting the risks of supply chains that are outside of America’s control.”

More efficient, more affordable: BAE Systems said the CHIPS and Science Act funding would allow it to upgrade old machines and make its facilities more efficient, cutting in half the cost of the chips it produces. 

What we’re doing: The NAM strongly supported the CHIPS and Science Act and helped secure several manufacturing priorities in the final legislation. Today, it continues to fight for policies that support and foster chip manufacturing in the U.S.

  • The NAM has kept industry stakeholders abreast of funding deadlines and other developments, created resource guides for members and hosted Commerce Department speakers on this subject.

Permitting reform platform: In addition, the NAM has been in ongoing communication with Congress about the pressing need for permitting reform to speed the construction of semiconductor-related infrastructure.

  • “Great to see investments from the NAM-championed CHIPS and Science Act starting to make their way to manufacturers in America, but if we want to unlock the full potential of this vital legislation, comprehensive permitting reform must follow,” the NAM said on Tuesday.
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