The Biden administration said on Monday that it will give $35 million to BAE Systems to boost production at a New Hampshire facility that makes chips for military aircraft, including F-15 and F-35 jets. This announcement marked the first of several upcoming federal investments in computer chip production.
The focus of the statute is on national security, as evidenced by the Commerce Department’s selection of a military contractor over a traditional chip maker. Modern weapons systems rely on cutting-edge processors that have the potential to be vital in both averting and waging war.
The investments are a “once-in-a-generation opportunity to advance our national and economic security and create a thriving, long-lasting domestic semiconductor manufacturing industry,” according to Commerce Secretary Gina Raimondo, who also stated that “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.”
In August 2022, President Joe Biden signed the incentives into law, in part because he worried that a military takeover of Taiwan may deny the globe access to cutting-edge computer processors and send the United States into a deep recession.
Around the beginning of Biden’s presidency, the coronavirus epidemic exposed the vulnerability of computer chip supplies by causing a global shortage that reduced U.S. auto manufacturing and raised prices.
“To maintain America’s leadership in emerging technologies, the Department of Commerce will allocate billions more in funding to increase semiconductor production in the country and enhance research and development resources,” Biden stated in a statement.
Additionally, Biden stated that more than $230 billion in projected investments in semiconductors and electronics have already resulted from the incentives his government is offering.
While in New York, the Democratic president visited two proposed Intel factories in Ohio and a new Taiwan Semiconductor Manufacturing Co. plant in Arizona. He also highlighted IBM’s investments. Ahead of the 2024 elections, Biden has included these financial pledges in his pitch to voters, claiming that his policies have revitalized the American economy.
Government representatives stated that taxpayers will ultimately save money as a result of the investment in the BAE Systems facility. The funds that the corporation will pay out when it meets the criteria will assist in quadrupling the plant’s manufacturing capacity, which will lower the cost of producing the chips and result in net savings for the federal agencies that purchase them.
The expanded capabilities will also benefit NATO friends and partners in Asia, according to White House national security adviser Jake Sullivan. However, he emphasized that safeguarding the United States required an expanded manufacturing base.
“We don’t want to find ourselves in a situation where vital requirements for national security depend on unreliable foreign supply chains,” Sullivan stated. “We don’t want to be in a situation where we can’t get in touch with another country in an emergency.”
