BAE Systems, Inc. (New Hampshire)

Project Summary

The Department of Commerce awarded BAE Systems Electronic Systems, a business unit of BAE Systems, Inc., up to $35.5 million in direct funding to support the modernization of the company’s Microelectronics Center in Nashua, New Hampshire, which is designated as a Trusted Foundry by the U.S. Department of Defense. The investment will contribute to a more resilient semiconductor supply chain in the United States and bolster the company’s ability to serve mission-critical U.S. defense programs.

Economic and National Security Impact

BAE Systems Electronic Systems’ Microelectronics Center (MEC) in Nashua, New Hampshire, is a mature-node semiconductor facility that produces Monolithic Microwave Integrated Circuit (MMIC) chips, which are critical components for advanced military aircraft and commercial satellite systems. When installed in a military system, such as front-line fighter aircraft, MMICs allow the system’s computers to interact with the electromagnetic (e.g., radio) environment around the aircraft. These interactions serve military purposes and drive mission outcomes when engaging with adversaries.

As a result of the modernization of the MEC supported by the CHIPS award, the company will quadruple its production capacity for MMIC chips, and replace aging tools with latest technology and equipment, mitigating the risk of an operational disruption in the event of a tool breakdown. The investment will also cut the company’s planned modernization timeline in half, bolstering the facility's ability to serve mission-critical defense programs. As a result of the investment, the project is now expected to be completed by approximately 2028.

The Department’s investment will advance U.S. economic and national security, largely due to the importance of the MEC to U.S. defense programs. Specifically, it is the key source of chips for a significant portion of U.S. military aircraft programs. As a result of the CHIPS award and the expedited timeline of the modernization, the company will be better positioned to meet the current and future demand from the U.S. Department of Defense. Because the MEC is a DoD-accredited source for the specific high-performing MMICs that are produced at the facility, the expansion of capacity at the MEC will be beneficial for U.S. national security.

In addition to U.S. defense programs, the CHIPS award will also support the MEC’s capacity to serve commercial customers, particularly in the satellite communications and test and measurement sectors, which would further enhance U.S. economic resilience and security.

Financial and Commercial Terms

As stated in the CHIPS Notice of Funding Opportunity (NOFO) for Commercial Fabrication Facilities, CHIPS for America will disburse direct funding to the company for capital expenditures spent on the projects based on the completion of construction, technology, production, and commercial milestones. The CHIPS Program Office will track the performance of each CHIPS Incentives Award via financial and programmatic reports, in accordance with the award terms and conditions. All CHIPS funding recipients are required to adhere to restrictions pursuant to the CHIPS Act and NOFO regarding stock buybacks and national security guardrails, which limit the sharing of intellectual property.

Workforce, Community, and Environmental Commitments

BAE Systems has committed to supporting New Hampshire and Massachusetts through community investment in 2025. This includes supporting the larger Nashua, NH community by continuing to invest in community and development programs like the Microelectronics Boot Camp program BAE Systems runs with Nashua Community College, BAE Systems’ Tech Power Grant, and providing support for Women in Technology (WIT), Massachusetts and New Hampshire high school engineering career days, and high school and college internships. BAE Systems will also expand access to workforce opportunities by providing apprenticeship opportunities in collaboration with Nashua Community College and by offering semiconductor-specific certificate programs to high school graduates and current employees.

BAE Systems’ commitments align with the Good Jobs Principles published by the Departments of Commerce and Labor, and BAE Systems will regularly report to the Department of Commerce on its efforts to uphold these commitments and other efforts to advance the Good Jobs Principles.

BAE Systems is also committing to several worker safety and environmental measures related to this award:

• Adoption of Most Protective Occupational Exposure Limits: BAE Systems will apply the lowest (i.e., most protective) occupational exposure limit (OEL) among all applicable published health and safety standards (including Occupational Safety and Health Administration, National Institute for Occupational Safety and Health, California OSHA, and American Conference of Governmental Industrial Hygienists standards), for chemicals used in the facility’s operations. 

• Carbon-Free Energy: BAE Systems is undertaking efforts to operate as an entity with carbon-free energy to the maximum extent possible, with the goal of operating with 100% carbon-free energy in all operations by the end of 2030.

• Water Recycling and Reuse: BAE Systems is undertaking efforts to recycle and reuse its water, recycling at least 20% of water used by the end of 2030.

•  Public Reporting: Within the next year, BAE Systems will publicly post its environmental responsibility goals on its public webpage and will then report annually on progress against these goals.

Site Photos

Credit: BAE Systems

Credit: BAE Systems

Credit: BAE Systems

Credit: BAE Systems