Published in PC Hardware

Intel bags €3.2 billion from US Army

by on07 March 2024

I love the smell of burning chips in the morning 

According to congressional aides, the US government is set to splash out €3.2 billion on Intel so the chipmaker can make advanced semiconductors for military and intelligence programmes.

The cash, hidden in a speedy spending bill the House passed on Wednesday, would make Intel a dominant domestic player in the lucrative defence market.

The funding, which would run over three years, is for the "secure enclave" programme. It comes from a broader €36 billion Chips and Science Act grant pool that's designed to persuade chipmakers to make semiconductors in the US. More than 600 companies have shown interest in the funding.

In November, the Wall Street Journal reported that Chipzilla was in talks for between €2.8 billion and €3.7 billion in government handouts from the programme.

Intel is set to receive a total Chips Act incentive package of more than €9.2 billion that includes both grants and loans, Bloomberg has reported. The company refused to comment on the pending €3.2 billion investment.

"We are still reviewing the effect of the appropriations text on the programme. The department looks forward to continuing to work with Congress on implementing the Chips and Science Act in a manner the promotes our economic and national security."

The Senate is expected to pass the legislation by a Saturday deadline.

The funding comes as Commerce prepares to announce multi-billion-euro awards to advanced chipmakers like Intel and Asian rivals Taiwan Semiconductor Manufacturing Co. and Samsung Electronics, all with the goal of building domestic manufacturing capabilities.

The agency has already announced three grants, including a smaller national-security-focused award to the American subsidiary of BAE Systems Plc and a €1.4 billion grant to GlobalFoundries, which makes older-generation semiconductors.

Senators Maria Cantwell, who chairs the Commerce Committee, and Roger Wicker and Jack Reed, the top Republicans and Democrats on the Armed Services Committee, raised concerns last year about the decision to award one company a contract to build a secure enclave at a higher cost than what might otherwise be needed to secure those chips, the aides said.

The initiative is separate from an existing Defence Department programme that identifies secure facilities to supply military chips, including from firms like GlobalFoundries and IBM. The Pentagon has also separately awarded €220 million to eight regional technology hubs focused on semiconductors with defence applications.

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