Rocket Lab Receiving $23.9M to Expand Production of Semiconductors for Spacecraft

This proposed CHIPS investment would create more than 100 direct manufacturing jobs.

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Rocket Lab

Rocket Lab has signed a tentative agreement with the Department of Commerce that would provide the U.S. aerospace manufacturer with $23.9 million in funding under the CHIPS and Science Act, which provides investment for U.S. manufacturing companies specializing in fields including nanotechnology, clean energy, quantum computing, and artificial intelligence.

If it receives the money, Rocket Lab said it will put it toward boosting production of compound semiconductors for spacecraft and satellites, including a planned expansion and modernization for its facility in Albuquerque, New Mexico. The company said the investment would create more than 100 manufacturing jobs.

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    Rocket Lab acquired SolAero Technologies Inc in 2022, making Rocket Lab one of only two companies domestically, and three companies outside of Russia and China, that specializes 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. The space-grade solar cells produced at Rocket Lab’s Albuquerque, New Mexico facility power critical space programs such as missile awareness systems and exploratory science missions including the James Webb Space Telescope, NASA’s Artemis lunar explorations, Ingenuity Mars Helicopter, and the Mars Insight Lander. Rocket Lab's technology also serves a booming commercial satellite market, such as powering the OneWeb broadband internet satellite constellation.

    This proposed CHIPS investment would help create a more robust and resilient supply of space-grade solar cells. The modernization and expansion project would also increase Rocket Lab’s compound semiconductor production by 50% within the next three years—helping to domestically meet the growing national security and consumer demand for these solar cells.

    In addition to these proposed federal incentives, the State of New Mexico has also committed to providing financial assistance and incentives with a total value of $25.5 million to Rocket Lab in support of this effort.

    Rocket Lab 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.

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