Rocket Lab's Strategic Momentum: How the CHIPS Award and Neutron Launch Site Signal a Pivotal Turn in Space Tech Investment

The U.S. government's aggressive push to dominate the semiconductor and space technology sectors has created a rare opening for companies like Rocket Lab (RKLB). With a $23.9 million CHIPS Act award and a $5.6 billion National Security Space Launch (NSSL) contract, Rocket Lab is not just surviving—it's thriving in a landscape where national security and commercial innovation collide. For investors, this is a golden opportunity to assess a company that's positioning itself at the intersection of two of the most critical industries of the 21st century.

The CHIPS Award: A Semiconductor Powerhouse for Space

Rocket Lab's recent CHIPS Act funding is more than a cash infusion—it's a strategic endorsement. The company is one of only two U.S. firms producing radiation-hardened compound semiconductors and space-grade solar cells, a niche but mission-critical segment. By expanding its New Mexico facility to nearly double wafer production to 35,000 per month, Rocket Lab is addressing a bottleneck in the U.S. space supply chain. This isn't just about manufacturing; it's about securing the backbone of national security missions, from the James Webb Space Telescope to Artemis lunar landers.

The CHIPS Act funding also aligns with broader U.S. priorities to reduce reliance on foreign semiconductor suppliers. Rocket Lab's solar cells have already powered Mars rovers and lunar landers, proving their reliability. With the U.S. government prioritizing domestic production, Rocket Lab's expansion ensures it can meet surging demand from both commercial and defense clients.

Neutron Launch Site: A Gateway to the $35 Billion Market

The Neutron rocket is Rocket Lab's crown jewel. Designed to carry 13,000 kg payloads, it's a direct competitor to SpaceX's Falcon 9 in the medium-lift segment. The company's Neutron Launch Complex 3 at Wallops Flight Facility in Virginia is nearly complete, with a water deluge system capable of pumping an Olympic-sized pool of water every 40 seconds. This infrastructure isn't just impressive—it's essential for handling the intense heat and pressure of Neutron's inaugural launch, expected in late 2025.

The NSSL contract is a game-changer. Rocket Lab is one of two companies selected to launch U.S. National Security payloads, a role that demands reliability and resilience. With a $5.6 billion ceiling and a focus on reusability, Neutron's development is backed by a contract that ensures long-term revenue visibility. The first launch will feature a “soft splashdown” of the first stage, with full ship-based landings planned for 2026. This phased approach minimizes risk while demonstrating progress, a critical factor for investors wary of tech delays.

Strategic Alignment with U.S. Government Priorities

Rocket Lab's alignment with U.S. defense and space priorities is no accident. Its Wallops facility is a hub for hypersonic testing via the HASTE program, securing seven missions under the $1.45 billion MACH-TB 2.0 initiative. This ties Rocket Lab to the DoD's push for rapid, reusable launch systems and point-to-point cargo transportation. Additionally, its $275 million acquisition of Geost—a provider of electro-optical payloads—bolsters its capabilities in satellite imaging and defense tech, further embedding it in the U.S. space industrial base.

The company's U.S.-centric supply chain is another advantage. With no China-linked dependencies, Rocket Lab fits neatly into the Biden administration's “reshoring” agenda. As geopolitical tensions escalate, this independence will only increase its appeal to government clients.

Financials and Undervaluation Potential

Despite a 2024 net loss of $190 million, Rocket Lab's Q2 2025 revenue surged 36% year-over-year to $144.5 million, with a $1.07 billion contracted backlog. Its $450 million cash reserve provides flexibility to fund Neutron's development and automate production, reducing long-term costs. While the stock has underperformed compared to peers like SpaceX, this undervaluation could be a buying opportunity.

The Verdict: A High-Stakes Bet with High Rewards

Rocket Lab is a company in transition. The CHIPS Award and Neutron rocket represent a pivot from small satellite launches to a dominant role in national security and medium-lift missions. While risks remain—such as Neutron's technical hurdles and competition from SpaceX—the company's strategic alignment with U.S. priorities, robust government contracts, and expanding production capacity make it a compelling long-term play.

For investors willing to stomach short-term volatility, Rocket Lab offers a unique opportunity to capitalize on the U.S. government's $100+ billion space and semiconductor agenda. The question isn't whether Rocket Lab can succeed—it's whether the market is pricing in its potential to become a cornerstone of America's space industrial base.

Investment Advice: Consider a cautious long position in Rocket Lab, with a focus on its Neutron launch milestones and CHIPS Act-driven production expansion. Monitor the first Neutron launch in late 2025 and subsequent NSSL contract execution for catalysts. Diversify with exposure to the broader space sector, but Rocket Lab's unique positioning in both semiconductors and launch services makes it a standout in a high-growth niche.