Biden Administration Chooses Military Supplier for First CHIPS Act Grant

Biden Administration Chooses Military Supplier for First CHIPS Act Grant

The Biden administration will announce on Monday that BAE Systems, a defense contractor, will receive the first federal grant from a new program aimed at shoring up American manufacturing of critical semiconductors.

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, administration officials said. 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 award is the first of several expected in the coming months, as the Commerce Department begins distributing the $39 billion in federal funding that Congress authorized under the 2022 CHIPS and Science Act. The money is intended to incentivize the construction of chip factories in the United States and lure back a key type of manufacturing that has slipped offshore in recent decades.

Gina Raimondo, the commerce secretary, said on Sunday that the decision to select a defense contractor for the first award, rather than a commercial semiconductor facility, was meant to emphasize the administration’s focus on national security.

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