New Hampshire city gears up to quadruple its chipmaking for fighter jets

In the high-dollar, high-tech world of chipmaking, $35 million is a pittance.

But the Biden administration’s first CHIPS Act grant, to BAE Systems’ semiconductor plant in Nashua, New Hampshire, could still bring significant changes for the city of 91,000 people.

“We have a really great workforce right now that’s underemployed,” said Liz Hannum, Nashua’s economic development director, who said the funding influx will jump-start workforce upskilling. “Getting them the training that they need to get higher-paying jobs is going to be absolutely amazing.”

BAE, a British military contractor, is New Hampshire’s largest private employer, Hannum said. It’s already the U.S. armed forces’ main supplier of monolithic microwave integrated circuits, which are critical for many defense technologies, including the systems used in F-35 fighter jets.

The federal grant is set to finance upgrades to BAE’s microelectronics center in Nashua that has long provided semiconductors for military aircraft, allowing it to quadruple its output of MMIC chips, officials said.

To do that, Hannum added, “they’re going to need a lot more jobs.”

BAE Systems’ Microelectronics Center in Nashua, N.H.BAE Systems

The initial gains, though, will be incremental. Relative to other types of manufacturing, chipmaking is highly automated and doesn’t typically require vast workforces; initial projections for nationwide job gains spurred by the CHIPS Act were in the mid-five digits. And Nashua already has a long history of high-tech employment, including in defense applications, that predates BAE’s presence by decades.

The microelectronics site is one of several BAE operations in and around the city. A low-slung brick building of 110,000 square feet (an area just shy of two football fields), it employs only 200 or so of the company’s 3,700-person workforce in southern New Hampshire, according to Cheryl Paradis, vice president and general manager of BAE’s Fast Labs unit.

The facility’s head count is expected to grow by at least 12%, she said, and BAE has committed to hiring at least six new technicians a year for the next five years.

“We’ll get to do new advanced designs on this new equipment, because it can handle more details, more capacity, more capability,” Paradis said of the impact of the grant, a sliver of the massive $52.7 billion pool created by last year’s bipartisan CHIPS and Science Act.

Cheryl Paradis, general manager of BAE’s Fast Labs.BAE Systems

“The modernization of this foundry is really what’s going to secure our nation’s ability to continue providing the most situational awareness and the most survivability” for important defense technologies, she said, adding that BAE’s electronic warfare systems protect around 80% of U.S. fixed-wing military aircraft.

Tightening domestic control of supply chains for these sensitive tools was a key goal for lawmakers who backed the measure.

“This proposed investment aligns with the core objective of the CHIPS Program to help fill specific needs in the national security ecosystem,” Michael Schmidt, director of the CHIPS Program Office, said in a statement.

Like other disbursements to follow, the grant isn’t yet a done deal, a CHIPS Program spokesperson said. Next steps include an in-depth review by federal administrators, with grantees assessed according to confidential milestones, akin to a “commercial diligence” process, before receiving the award.

While the extent of the CHIPS grants’ job creation remains to be seen, people with chipmaking skills are already in demand. After decades of sending semiconductor production overseas, the U.S. doesn’t yet have enough trained workers to immediately fulfill its reshoring push.

Hence municipal leaders’ planned eight-to-10-week course at Nashua Community College on the basics of chipmaking — one of dozens that the White House said this summer the CHIPS Act has spurred. Among other things, Nashua students will learn how to operate in “clean rooms,” the highly controlled environments where chips are fabricated, since contact with even small particles can cause damage.

The training program is part of a $200,000 municipal incentive package — funded with money the city received from the American Rescue Plan, which Democrats passed in 2021 — that Nashua’s mayor said earlier this year was key to BAE’s securing the grant. Hannum said the local funding will cover tuition for at least 180 students over the next five years, with a range of employers standing to benefit.

“BAE has lots of those needs, but so do some other companies around,” she said.

In addition to other defense-sector employers such as Marmon Aerospace & Defense in Manchester, Southern New Hampshire boasts other high-tech firms in fields including life sciences, like the diagnostic test maker Thermo Fisher Scientific with operations in Portsmouth and Newington.

The Nashua training program is partly modeled on previous workforce development efforts between BAE and the city. An earlier microelectronics boot camp, established in 2016 at the community college, has graduated 300 students with a 98% job placement rate, said Paradis.

And demand — for advanced chips and workers to produce them — is only set to grow.

“If you look at where we are as a nation and where we need to go,” she said, “there are volume increases coming.”