Rocket Lab Receives IDR 389.6 Billion From US To Increase Semiconductor Production

US Commerce Secretary Gina Raimondo said solar cells are very important to keep communications and space technology empowered and operational (photo: x @SecRaimondo)

JAKARTA - The US Commerce Department announced on Tuesday 11 June that it plans to provide a $23.9 million Rocket Lab fund to increase the production of combined semiconductors used in satellites and spacecraft.

"This funding is aimed at the Rocket Lab unit, SolAero Technologies Corp, which will help create a stronger and more resilient supply of space-class solar cells to power spacecraft and satellites," the department said. They also added that these funds would increase Rocket Lab's combined semiconductor production by 50% in the next three years.

The funds come from a $52.7 billion manufacturing subsidy program and chip research from President Joe Biden's administration that has benefited companies such as Samsung Electronics from South Korea, Intel, and TSMC from Taiwan.

In addition, the State of New Mexico has committed to providing US$25.5 million in financial assistance and incentives to Rocket Lab as the company expands its facilities inyang.

Rocket Lab, founded in 2006 by Peter Beck of New Zealand, is one of two US companies specializing in the production of a highly efficient and radiation-resistant combined semiconductor called space-class solar cells.

US Commerce Secretary Gina Raimondo said solar cells are critical to keeping communications and space technology empowered and operational, and the $23.9 million award will help Rocket Lab expand its production facilities to meet ever-increasing demand for chips from the US military, NASA, and the commercial space industry.

The company's solar cells support US space programs, including the missile awareness system, the James Webb Space Telescope, NASA's Artemis lunar exploration, Mars Ingenuity Helicopters, and Mars Insight Lander.

Rocket Lab has won several hundred million dollars in US federal contracts, including for satellite production, spacecraft launches, and deals to deliver cargo using its rockets.

This latest award, like others from the chip subsidy program, has not been finalized and the amount could change after the Commerce Department conducted a due diligence.

The proposed investment will also benefit the expansion of Rocket Lab facilities in feasibility and create more than 100 manufacturing jobs.

Rocket Lab also plans to claim investment tax credit from the Treasury Department of up to 25% of eligible capital expenditures. The investment tax credit made by the Chips Act is estimated to be worth around $24 billion.