Intel secures major Pentagon chip deal

The US government has placed trust in Intel despite recent financial struggles.

Intel has qualified for $3.5 billion in federal grants to make semiconductors for the Pentagon.

Intel Corporation has been awarded up to $3.5 billion in federal grants to produce advanced semiconductors for the Pentagon under the Secure Enclave program. The initiative aims to develop military-grade chips in several states, including Arizona, and is part of broader efforts to reduce reliance on foreign manufacturers.

The grant follows previous funding announcements for Intel, which is set to receive as much as $8.5 billion in grants and $11 billion in loans from the Chips and Science Act. This new program highlights the government’s trust in Intel despite its recent financial struggles. Intel is still negotiating terms for its broader incentive package, including facilities in Ohio, New Mexico, and Oregon.

The Pentagon’s decision to choose Intel reflects limited options, as it is the only US manufacturer of advanced processors. Other semiconductor makers, such as Taiwan Semiconductor Manufacturing Co. and Samsung, have also received US support to build facilities, but they remain foreign-based companies.

While the specific chip models to be produced for the Pentagon are unknown, the Secure Enclave program marks a significant commitment by the US government to bolster its semiconductor industry. Intel continues to seek further contracts and has invited other tech companies to explore using its chip facilities.