Rocket Lab Secures $23.9 Million US Grant to Enhance Semiconductor Production

Rocket Lab has secured a $23.9 million US grant to boost semiconductor production. As a leading end-to-end space company, Rocket Lab designs and manufactures rockets, spacecraft, and related services. The grant will support the company's efforts in developing advanced space technology and increasing production capacity.

Rocket Lab Corporation (Nasdaq:RKLB), a prominent end-to-end space company, has secured a $23.9 million grant from the U.S. Department of Commerce under the CHIPS and Science Act. This funding will support the company's expansion of semiconductor manufacturing for space-grade components, aiming to nearly double its production capacity from 20,000 to approximately 35,000 wafers per month over the next five years [1].

Rocket Lab's announcement follows a significant acquisition of Geost, an electro-optical payload provider, for $275 million, which will enhance its capabilities in electro-optical and infrared sensor systems for national security space missions [2]. The company's leadership in American-made semiconductor technologies, built over 25 years, positions it well to scale production and deliver for both government and commercial customers [3].

The expansion is expected to strengthen domestic supply chains for critical space components and increase Rocket Lab's U.S.-based workforce to more than 2,000 employees across various states [1]. U.S. Secretary of Commerce Howard Lutnick welcomed the announcement, stating that it will strengthen the country's space sector while supporting domestic manufacturing jobs [1].

Rocket Lab's solar cell technology has powered notable space missions, including the James Webb Space Telescope, NASA's Artemis lunar explorations, and the Ingenuity Mars Helicopter. The company operates launch pads in New Zealand and Virginia, with its Electron launch vehicle becoming the second most frequently launched U.S. rocket annually [1].

Financial data from InvestingPro shows Rocket Lab maintains a healthy liquidity position with a current ratio of 2.67 and holds more cash than debt on its balance sheet, though it remains in investment mode with negative EBITDA of $188.8 million in the last twelve months [1]. The company's recent second-quarter results, with revenue and adjusted EBITDA surpassing consensus estimates, underscore its strong financial performance [1].

Rocket Lab's expanded U.S. semiconductor capacity could strengthen allied supply chains for space-grade components, offering greater resilience and interoperability for Defense and commercial space projects under the AUKUS partnership and beyond [2].

References:
[1] https://www.investing.com/news/company-news/rocket-lab-to-boost-us-semiconductor-capacity-with-239m-chips-act-award-93CH-4207625
[2] https://www.spaceconnectonline.com.au/manufacturing/6675-rocket-lab-ramps-up-us-investment-in-semiconductor-manufacturing-for-national-security-space-missions
[3] https://simplywall.st/stocks/us/capital-goods/nasdaq-rklb/rocket-lab/news/how-investors-may-respond-to-rocket-lab-rklb-doubling-space