intel-confirms-$3-billion-defense-department-chips-act-grant

(Bloomberg) — Intel Corp. said on Monday that it’s eligible to receive as much as $3 billion in US government funding to manufacture chips for the military, confirming earlier reporting by Bloomberg.

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The effort, called the Secure Enclave, aims to establish a steady supply of cutting-edge chips for defense and intelligence purposes. Lawmakers set aside $3.5 billion for the program as part of the 2022 Chips and Science Act, which aims to boost the American semiconductor industry and reduce reliance on Asia. The award is separate from a possible $8.5 billion Chips Act grant that Intel is set to receive to support commercial factories across four US states.

Intel shares rose as much as 6.5% to $20.94 Monday on the news. The stock was down 61% this year through Friday’s close.

Earlier: Intel Shores Up $3.5 Billion Deal to Make Chips for Military

“Today’s announcement highlights our joint commitment with the US government to fortify the domestic semiconductor supply chain,” Chris George, president and general manager of Intel Federal, a subsidiary of Intel focused on government work, said in a statement. The Departments of Defense and Commerce said in a joint statement that the award will “build on Intel’s work with the DoD and will further strengthen our national security.”

The Pentagon will actually execute the award, according to the joint statement, under an agreement between the Defense Department and Commerce Department, which is responsible for the broader Chips Act grant program.

The $3 billion agreement covers the funding lawmakers appropriated in March for fiscal years 2024 and 2025, which started July 1. The remaining $500 million for Secure Enclave would be appropriated in fiscal year 2026, according to the bill text.

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