Rocket Lab receives $23.9 million grant to expand chip manufacturing

From the US Department of Commerce, Rocket Lab (NASDAQ: RKLB, WKN: A3CY7P) has received a $23.9 million grant to increase its production capacity for the manufacturing of highly durable compound semiconductors in Albuquerque, New Mexico. In doing so, the US government is recognising the company’s important role in national security, because apart from Rocket Lab, only one other company in the US is capable of manufacturing semiconductors suitable for use in space.

Space is an area of application that places extremely high demands on people and technology. Severe temperature differences in an extremely short time and high levels of cosmic radiation are just two of the special challenges that are unknown on Earth, but have to be overcome every day in space. Every component, no matter how small, that is used there must therefore meet the highest standards of quality and performance.

This also applies to the many semiconductors used, for example, in solar cells and optoelectronic devices. They supply the space stations and far-flying probes with electrical energy, thus enabling the highly specialised work that is carried out in space. Since these semiconductors have to meet much higher demands than ordinary chips, Rocket Lab started producing these special semiconductors itself 25 years ago. This is done in New Mexico at the Albuquerque site.

The US government considers the ability to produce such high-quality chips to be essential to national security. Therefore, a great deal of emphasis is placed on further expanding the production of these semiconductors in the United States. At the beginning of the year, Rocket Lab and the US Department of Commerce therefore entered into a preliminary agreement to finance the planned expansion stages for the Albuquerque plant.

A niche that is crucial to US national security

The US Department of Commerce investment will enable Rocket Lab to strengthen its position as a leading manufacturer of space-qualified solar cells. In the US, only Rocket Lab is still able to develop and manufacture these highly specialised chips. The expansion of production in Albuquerque will create new jobs for highly qualified personnel.

The technology centre was opened in the late 1990s. Today, more than 370 employees work in it and the solar cells manufactured here have already supplied more than four megawatts of electricity for over 1,100 satellites in orbit. Interplanetary missions, NASA’s upcoming lunar explorations, robots that will soon explore Mars, but also commercial satellites to support telecommunications are operated with them.

A steady supply of these special semiconductors and solar cells is therefore crucial to the continuation of the work that has already been started. Rocket Lab is making its contribution to this and, with the support of the US government, can now proceed to further expand its production capacity.