Biden administration chooses Nashua BAE plant for first $35 million grant under CHIPS act

Defense contractor BAE Systems Inc. could be on track to upgrade its electronics facility in Nashua, after reaching a preliminary agreement with the U.S. Department of Commerce to accept $35 million in federal funding.

The funding agreement is the first announced so far by the Biden administration under the CHIPS and Science Act. That 2022 law is intended to bolster electronics manufacturing in the United States in the face of steep competition from China and other countries.

The $35 million would allow the Nashua plant to modernize its Microelectronics Center, replace tools, and “quadruple the production of chips necessary for critical defense programs including the F-35 fighter jet program,” the department said in a statement.

Tom Arseneault, CEO of BAE Systems, hailed the agreement, saying in a statement it would help the company modernize.

“Microelectronics are at the heart of the technology and products we make for our defense and aerospace customers – from next-generation aircraft and satellites to military-grade GPS and secure communications,” he said.

The agreement is nonbinding and not final; BAE will now need to submit to a “comprehensive due diligence process” and a final negotiation process over its terms. 

But Commerce Secretary Gina Raimondo said in a statement it would represent “a substantial investment in New Hampshire’s expanding defense industrial base,” strengthen U.S. supply chains, and help the state’s economy.

In addition to BAE, New Hampshire is home to defense contractor facilities from Lockheed Martin, Boeing, Northrop Grumman, Raytheon, and others.