On Tuesday, the US Commerce Department announced plans to award Rocket Lab$23.9 million to significantly boost the production of compound semiconductors used in satellites and spacecraft. This funding aims to increase the production of space-grade solar cells by 50% over the next three years, bolstering the supply chain for critical space technologies. The funds come from the Biden administration's$52.7 billion chip manufacturing and research subsidy program, benefiting major companies like Samsung, Intel, and TSMC.

In addition to federal support, the State of New Mexico has committed$25.5 million in financial assistance and incentives to help Rocket Lab expand its Albuquerque facility. Rocket Lab, founded in 2006 by New Zealander Peter Beck, specialises in producing highly efficient, radiation-resistant space-grade solar cells. These solar cells are essential for powering various US space programs, including missile awareness systems, the James Webb Space Telescope, and NASA's Artemis lunar explorations.

Commerce Secretary Gina Raimondo emphasised the importance of solar cells in maintaining communication and space technology operations. The$23.9 million award will help Rocket Lab meet the growing demand for these components from the US military, NASA, and the commercial space industry. The expansion in Albuquerque is expected to create over 100 manufacturing jobs and enhance the company's capacity to support US space missions.

Rocket Lab has secured numerous federal contracts worth hundreds of millions of dollars for satellite production and spacecraft launches. The proposed investment, which could be adjusted after further review by the Commerce Department, will also allow Rocket Lab to claim up to 25% in investment tax credits for qualified capital expenditures, part of the broader benefits provided by the Chips Act.