JMAR Technologies ( JMAR) said on Wednesday that its JSAL division has received a contract valued up to $10 million from the Naval Air Warfare Center in Maryland.

The company, which develops and markets proximity X-ray lithography systems, will produce next-generation lithography masks for use in advanced semiconductors. The contract, funded by the Defense Advanced Research Projects Agency, is a two-year effort to develop millimeter wave integrated circuits for use in government radar, communication, and space-borne applications.

The JSAL division will contract IBM Microelectronics to produce the masks, building on the advancements in X-ray mask manufacturing technology made by IBM in recent years.

In a press release, JMAR said, "This is clearly a major step forward in our effort to deliver proximity X-ray lithography to the semiconductor industry. The masks provided by IBM under this program will play a critical role in enabling our PXL systems to demonstrate their ability to produce high-performance chips, at lower costs, well before other alternatives become available."

Shares of JMAR were climbing about 5% on the news to $2.41 after closing at $2.30 Tuesday.