Intel set to receive $3.5b in grants to produce chips for US military

Technology giant is frontrunner for a new US initiative seeking to develop local technologies for US Defense Department while reducing reliance on foreign producers

Calcalist|
Intel is reportedly set to receive $3.5 billion in grants from the U.S. government to build chip manufacturing facilities for the U.S. Department of Defense, according to a Bloomberg report citing sources familiar with the matter. The company has reached a binding agreement with government officials.
As part of the initiative, facilities for producing advanced computer chips for both civilian and military purposes are expected to be constructed in several U.S. states, including a plant in Arizona.
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 מטה אינטל בקליפורניה
 מטה אינטל בקליפורניה
(Photo: Getty Images)
Although Intel was the frontrunner for the contract, the selection process faced pressure from competing chip manufacturers, concerns in Washington about relying on a single company and bureaucratic hurdles which threatened to reduce Intel's grant.
According to Bloomberg, an official announcement of Intel's win could be made as early as this week. The amount would be in addition to the $8.5 billion in grants and $11 billion in loans Intel received in March under the CHIPS and Science Act, signed by U.S. President Joe Biden in 2022 to boost the American chip industry and reduce reliance on Asia.
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אינטל חושפת מעבד חדש בשם Lunar Lake
אינטל חושפת מעבד חדש בשם Lunar Lake
Intel's Lunar Lake computer chip
(Photo: Intel)
The decision to choose Intel comes despite the company's current struggles. In August, Intel reported weak second-quarter results and announced plans to lay off 15% of its workforce.
According to Bloomberg, Intel's board discussed a range of drastic recovery measures last week, including halting multi-billion-dollar factory construction projects, selling divisions or stakes in companies like Mobileye and splitting the chip giant's core operations into separate companies.
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