Intel lands $3 billion grant to make semiconductors for U.S. military
Intel Corp. has landed a $3 billion federal grant to make semiconductors for the U.S. military, the Santa Clara, California-based company announced Monday.
Intel was awarded the CHIPS Act grant via the Secure Enclave program, which is designed to support advanced chip production for U.S. military and intelligence applications. It’s also intended to ensure access to a domestic supply chain of semiconductors for national security, according to a company release.
“Today’s announcement highlights our joint commitment with the U.S. government to fortify the domestic semiconductor supply chain and to ensure the United States maintains its leadership in advanced manufacturing, microelectronics systems, and process technology,” Chris George, president and general manager of Intel Federal, said in a statement.
Intel’s stock jumped 6.3% on the news, closing at $20.91 on Monday, and moved even higher in after-hours trading. Still, the company’s stock is down 58% year-to-date.
A Intel spokeswoman declined to comment on whether the Secure Enclave program involves the company’s Ocotillo campus in Chandler, stating it’s “classified as a matter of national security, so no details to share.” Intel’s Chandler campus has more than 12,000 workers, making it one of the state’s largest employers.
Intel said its announcement reflects the “continued progress” of Intel Foundry, which plans to begin production of the company’s 18A chips in 2025.
Intel will produce its first 18A Xeon processors — called Clearwater Forest — at its Arizona factories, the Business Journal previously reported.
Intel’s Chandler Ocotillo campus expansion
Intel’s Secure Enclave award is separate from its CHIPS Act funding package announced in March to support a $32 billion expansion of its Ocotillo campus in Chandler. Intel is also expanding capacity at its manufacturing sites in Ohio, Oregon and New Mexico.
The White House plans to finalize discussions with semiconductor companies about CHIPS Act grants and begin disbursements of federal funds by the end of the year, a senior U.S. Department of Commerce official told the Business Journal in August.
The Secure Enclave program builds upon Intel’s previous microelectronics projects with the U.S. Department of Defense.
In 2020, Intel was awarded the second phase of the SHIP program, allowing the U.S. government to access Intel’s advanced semiconductor packaging capabilities in Arizona and Oregon. In 2023, Intel delivered the first multi-chip package prototypes under the SHIP program in what the company calls “a major achievement” in ensuring access to cutting-edge microelectronics packaging.
What’s more, Intel inked an agreement in 2021 with the Department of Defense to provide commercial foundry services for multiple phases of the agency’s RAMP-C program, which provides custom and integrated circuits for critical military systems.
Since then, Intel has onboarded several defense industry customers, including Boeing, Northrop Grumman, Microsoft, IBM and Nvidia, among others, according to the company.
Intel’s Secure Enclave grant comes at a tumultuous time for the company, which is reportedly undergoing a “massive reorganization” to bring it back to profitability, the Silicon Valley Business Journal reported.
Last month, Intel CEO Pat Gelsinger announced the company is cutting 15,000 jobs — or 15% of its workforce — after it reported weak second quarter financial results that reported a $1.6 billion loss.