Intel has qualified for up to $3.5bn in federal grants from the US government to produce semiconductors for military use. According to Bloomberg News, the grant is part of the US Department of Defense’s Secure Enclave programme, which aims to reduce dependence on foreign semiconductor manufacturers and ensure secure technology for defence needs. The programme supports companies in establishing or expanding their semiconductor production facilities in the US.
The funding is aligned with the CHIPS and Science Act, which allocates more than $50bn to support semiconductor research, development, and production in the US, addressing supply chain vulnerabilities.
Intel plans to use the grant to advance its semiconductor production capabilities in line with US Department of Defense requirements, developing technologies needed for defence and intelligence operations.
With support from the CHIPS Act, Intel is investing more than $100bn to expand domestic chip manufacturing. Over the next five years, Intel plans to invest in its facilities across Arizona, New Mexico, Oregon, and Ohio.
Intel’s Arizona bet
The expansion in Arizona includes two new semiconductor factories, each costing between $15bn and $20bn. These factories aim to meet growing demand and provide capacity for Intel Foundry customers.
In New Mexico, Intel is investing $3.5bn to develop its advanced semiconductor packaging technology, Foveros, which allows the mixing and matching of compute tiles to enhance performance for artificial intelligence, 5G, and edge computing.
In Ohio, Intel’s greenfield investment of more than $20bn to build two new fabs marks the largest private-sector investment in the state’s history. This initiative, dubbed the “Silicon Heartland,” aims to create a new regional cluster for US chipmaking and become a centre for advanced technology.
These investments are contingent on adequate CHIPS Act support and aim to address critical domestic supply chain gaps. They are also considered essential for US economic and national security.
Separately, the European Commission has approved more than $1.91bn in state aid from Poland for an Intel chip assembly and testing plant. Intel plans to invest up to $4.6bn in this facility near Wrocław, which could potentially expand its capacity.
In another development, Intel’s CEO, Pat Gelsinger, is expected to present a new strategic plan to the board later this month. According to a Reuters report, the plan includes divesting non-essential business units and revising capital expenditure. The strategy focuses on reducing costs by selling units like the programmable chip unit, Altera, acquired by Intel in 2015 for $16.7bn.
Recently, it was also reported that Qualcomm is considering acquiring segments of Intel’s chip design business, focusing on the client PC design business.
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