Rocket Lab Secures $23.9M Boost for Space-Grade Semiconductors

The U.S. Commerce Department is awarding Rocket Lab $23.9 million to increase compound semiconductor production by 50% within three years. This funding, derived from the Biden administration's chip subsidy program, aims to bolster the supply of space-grade solar cells critical for U.S. space missions, including those for NASA and the military.

The U.S. Commerce Department said on Tuesday it planned to award Rocket Lab $23.9 million to dramatically boost compound semiconductors used in satellites and spacecraft.

The award for Rocket Lab unit SolAero Technologies Corp "would help create a more robust and resilient supply of space-grade solar cells that power spacecrafts and satellites," the department said, adding it would "increase Rocket Lab's compound semiconductor production by 50% within the next three years." The funds are to come from the Biden administration's $52.7 billion chip manufacturing and research subsidy program that has benefited companies like South Korea's Samsung Electronics , Intel and Taiwan's TSMC.

Commerce Secretary Gina Raimondo said solar cells were crucial for keeping communication and space technology powered and operational, and the proposed Rocket Lab award would help give the U.S. military, NASA and the commercial space industry access to specialty semiconductors they need. Rocket Lab is one of two U.S. firms specializing in the production of highly efficient, radiation resistant compound semiconductors called space-grade solar cells, the department said.

The company, founded in 2006 by New Zealander Peter Beck, went public in the U.S. in 2021. Beck said the planned award would help the company expand production facilities to meet the U.S. government's growing demand for chips.

Rocket Lab solar cells support U.S. space programs, including missile awareness systems, the James Webb Space Telescope, NASA's Artemis lunar explorations, Ingenuity Mars Helicopter, and Mars Insight Lander. The company, known for launching satellites on its Electron small rocket, is expected to test its reusable Neutron rocket next year. The rocket is designed to deliver a large number of satellites to low Earth orbit and enable missions to Mars and Venus.

Rocket Lab has won several hundreds of millions of dollars in U.S. federal contracts, including for satellite production, the launch of spacecraft and a deal to explore delivering cargo using its rockets. The latest award, like others from the chips subsidy program, have yet to be finalized and amounts could change after the Commerce Department conducts due diligence.

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