Biden-Harris Administration Announces Preliminary Terms with Rocket Lab to Expand Production of Compound Semiconductors that Power Spacecrafts and Satellites

Biden-Harris Administration Announces Preliminary Terms with Rocket Lab to Expand Production of Compound Semiconductors that Power Spacecrafts and Satellites

the Biden-Harris Administration announced that the Department of Commerce and Rocket Lab, the parent company of space power provider SolAero Technologies Corp., have signed a non-binding preliminary memorandum of terms (PMT) to provide up to $23.9M in direct funding under the CHIPS and Science Act. The proposed CHIPS investment would help create a more robust and resilient supply of space-grade solar cells that power spacecrafts and satellites. The modernization and expansion project would increase Rocket Lab’s compound semiconductor production by 50% within the next three years – helping to meet the growing national security and commercial demand for these solar cells in the United States. The proposed investment would create over 100 direct manufacturing jobs.

“Solar cells are important for keeping our communication and space technology powered and operational, and this proposed award would help our military, NASA, and our commercial space industry have access to the specialty semiconductors they need to keep our country safe and continue to lead in scientific discoveries and space commerce,” said U.S. Secretary of Commerce Gina Raimondo. “Thanks to President Biden’s leadership and this proposed CHIPS investment, the United States is meeting the growing demand for these semiconductors while helping to diversify America’s chip manufacturing capabilities and creating new, quality jobs for workers in New Mexico.”

Headquartered in Albuquerque, New Mexico, Rocket Lab is one of two companies in the United States that specialize in the production of highly efficient and radiation resistant compound semiconductors called space-grade solar cells – devices used in space to convert light to electricity. Rocket Lab’s space-grade solar cells power important U.S. space programs, such as missile awareness systems and exploratory science missions, including the James Webb Space Telescope, NASA’s Artemis lunar explorations, the Ingenuity Mars Helicopter, and the Mars Insight Lander. Rocket Lab’s technology also serves a growing commercial satellite market. As the United States and other nations expand their technological presence in space, particularly with Low Earth Orbit (LEO) satellites that provide for more resiliency in space, there is a need for more space-grade solar cells to enable the industry’s transition. Space-based defense systems are also important components for our economic and national security, and are reliant on solar power.

“With today’s announcement, the President marks another important chapter for America’s semiconductor leadership, bringing the most innovative solar cell technology to New Mexico and boosting our leadership in space technology,” said White House National Economic Advisor Lael Brainard.

“Solar cells are increasingly important to maintaining United States’ leadership in space,” said Under Secretary of Commerce for Standards and Technology and National Institute of Standards and Technology Director Laurie E. Locascio. “Today’s announcement demonstrates a commitment to revitalizing all areas of America’s semiconductor industry alongside the research and development that makes these advances possible.”

“Semiconductors are central to modern life, to our economy, and to America’s future. We are proud to be strengthening that future with the support of the CHIPS Office by expanding our production facilities to meet growing demand for the semiconductors that power the nation’s most critical science, defense and commercial space missions,” said Rocket Lab founder and CEO Peter Beck. “For more than two decades our team has played an important role in the domestic production of semiconductors. This program is a continuation of our commitment to ensuring resilient U.S. supply chains and creating highly productive local jobs.”

In New Mexico, Rocket Lab will partner with New Space New Mexico (NSNM), a 501(c)(3) organization founded to accelerate the pace of innovation in New Mexico alongside government, academic, and private stakeholders. As part of this partnership, Rocket Lab will contribute $2 million over the next three years, allow access to their equipment, services, and personnel, and sponsor internship positions to advance the NewSpace Ignitor and Pathways to the Stars programs—two core initiatives of the NSNM program. NewSpace Ignitor will establish co-innovation hubs in Albuquerque, Navajo Nation, and rural southern New Mexico to provide opportunities and promote high-tech manufacturing in underserved communities.

The company has indicated that it plans to claim the Department of the Treasury’s Investment Tax Credit, which is expected to be up to 25% of qualified capital expenditures.

As explained in its first Notice of Funding Opportunity, the Department may offer applicants a PMT on a non-binding basis after satisfactory completion of the merit review of a full application. The PMT outlines key terms for a potential CHIPS incentives award, including the amount and form of the award. The award amounts are subject to due diligence and negotiation of award documents and are conditional on the achievement of certain milestones. After the PMT is signed, the Department begins a comprehensive due diligence process on the proposed projects and continues negotiating or refining certain terms with the applicant. The terms contained in any final award documents may differ from the terms of the PMT being announced today.

About CHIPS for America

The Department has received more than 670 statements of interest, more than 230 pre-applications and full applications for NOFO 1, and more than 160 small supplier concept plans for NOFO 2. The Department is continuing to conduct rigorous evaluation of applications to determine which projects will advance U.S. national and economic security, attract more private capital, and deliver other economic benefits to the country. The announcement with Rocket Lab is the tenth PMT announcement the Department of Commerce has made under the CHIPS and Science Act, with additional PMT announcements expected to follow throughout 2024.

CHIPS for America is part of President Biden’s economic plan to invest in America, stimulate private sector investment, create good-paying jobs, make more in the United States, and revitalize communities left behind. CHIPS for America includes the CHIPS Program Office, responsible for manufacturing incentives, and the CHIPS Research and Development Office, responsible for R&D programs, that both sit within the National Institute of Standards and Technology (NIST) at the Department of Commerce. NIST promotes U.S. innovation and industrial competitiveness by advancing measurement science, standards, and technology in ways that enhance economic security and improve our quality of life. NIST is uniquely positioned to successfully administer the CHIPS for America program because of the bureau’s strong relationships with U.S. industries, its deep understanding of the semiconductor ecosystem, and its reputation as fair and trusted. Visit https://www.chips.gov to learn more.

Resumen en Español:

La administración Biden-Harris ha anunciado un memorando preliminar con Rocket Lab para financiar con hasta $23.9 millones la producción de células solares espaciales bajo la Ley CHIPS y Ciencia. La inversión aumentará la producción de semiconductores compuestos de Rocket Lab en un 50% en tres años, creando más de 100 empleos directors. Las células solares espaciales son cruciales para los programas espaciales militares y comerciales de EE.UU., como los telescopios James Webb y las misiones lunares Artemis. Rocket Lab, en colaboración con New Space New Mexico, invertirá $2 millones en programas de innovación y manufactura tecnológica en comunidades desatendidas. El programa CHIPS for America busca revitalizar la fabricación de semiconductores en EE.UU., mejorando la seguridad económica y nacional.