Intel to get $3.5bn injection from US government to make military chips

The U.S. government is investing $3.5 billion in Intel to boost production of advanced chips for military and intelligence purposes, Bloomberg reported. The payment could be part of a rumored incentive package of more than $10 billion from the U.S. Chip and Science Act (including grants and loans), or it could be part of a proposed Secure Enclave program designed for military and intelligence chips and funded separately.

Intel is to receive $3.5bn from the US government to make military chips

The investment involves funding the Security Partition program for three years and is expected to make Intel the leading semiconductor company in the defense market. The program aims to improve the security and reliability of the semiconductor supply chain for military and intelligence applications. The funding reportedly comes from the broader Chip and Science Act grant pool, but it's unclear if this is part of Intel's rumored $10 billion in grants and loans.

Intel Foundry head Stu Pann recently confirmed in an interview that the company has signed a major foundry contract worth $1 billion with the U.S. government and the Department of Defense. Under the U.S. government's RAMP-C program, a number of industry players, including IBM, Microsoft and Nvidia, are developing chips for the U.S. military. For Intel, this is a major advantage when it comes to knowing the performance of its upcoming nodes. However, it should be noted that not all chips for military and intelligence applications require leading-edge manufacturing technology.

"Government funding has enabled them to use PDK at a much lower complexity than people who normally run test chips," Pann said. "So it really helps us understand how customers view our process/performance, which is the classic PPAC (power, performance, area and cost) : these test chips tell you what a PPAC looks like."

The funding announcement comes as the Commerce Department prepares to award billions of dollars in bonuses to leading chipmakers, including Intel, Micron and Samsung. The goal is to strengthen domestic semiconductor manufacturing capacity. The agency has announced three grants, including a national security-focused award to BAE Systems' U.S. subsidiary and a $1.5 billion grant to GlobalFoundries to produce older generation chips, including those for military and intelligence applications.