Intel to receive $3.5 billion to manufacture chips for Military

According to congressional officials, the US government is prepared to invest $3.5 billion in Intel Corp. to enable the chipmaker to manufacture cutting-edge chips for military and intelligence applications. The 'secure enclave' programme would receive the funds, which would be spread over three years. It is part of a larger $39 billion grant pool under the Chips and Science Act, which aims to persuade chipmakers to manufacture semiconductors in the United States. Over 600 businesses have shown interest in the money.

Intel is set to receive a total Chips Act incentive package of more than $10 billion that includes both grants and loans. The company declined to comment on the pending $3.5 billion investment.

“We are still reviewing the effect of the appropriations text on the programme,” the Commerce Department said in a statement. “The department looks forward to continuing to work with Congress on implementing the Chips and Science Act in a manner the promotes our economic and national security.”

The Senate is expected to pass the legislation by a Saturday deadline.

The funding comes as Commerce prepares to announce multi-billion-dollar awards to advanced chipmakers like Intel and Asian rivals Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co., all with the goal of building domestic manufacturing capabilities.

The agency has already announced three grants, including a smaller national-security focused award to the American subsidiary of BAE Systems Plc and a $1.5 billion grant to GlobalFoundries, which produces older-generation semiconductors.

Senators Maria Cantwell, who chairs the Commerce Committee, and Roger Wicker and Jack Reed, the top Republican and Democrat on the Armed Services Committee, raised concerns last year about the decision to provide an award to one company to build a secure enclave at a higher cost than what might otherwise be required to secure those chips, the aides said.