On Tuesday, Rocket Lab USA, Inc. ( RKLB ) inked a non-binding preliminary memorandum of terms with the Department of Commerce.

Under the deal, Rocket Lab will receive up to $23.9 million in direct funding under the CHIPS and Science Act.

This CHIPS investment would create more than 100 direct manufacturing jobs.

“Semiconductors are central to modern life, to our economy, and to America’s future. We are proud to be strengthening that future with the support of the CHIPS Office by expanding our production facilities to meet growing demand for the semiconductors that power the nation’s most critical science, defense and commercial space missions,” said Rocket Lab founder and CEO Sir Peter Beck. 

Rocket Lab has indicated that it plans to claim the Department of the Treasury’s Investment Tax Credit, which is expected to be up to 25% of qualified capital expenditures.

The investment would enable Rocket Lab to increase its production of compound semiconductors for spacecraft and satellites as part of an expansion and modernization of the company’s facility in Albuquerque, New Mexico.

Rocket Lab also sees a rise in its resilient supply of space-grade solar cells following the development.

The modernization and expansion project would also increase Rocket Lab’s compound semiconductor production by 50% within the next three years, helping to domestically meet the growing national security and consumer demand for these solar cells.

Price Action: RKLB shares are trading lower by 0.56% to $4.534 at last check Tuesday.

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