Intel Receives Billions of Dollars to Make Chips for Pentagon
Intel will receive $3,5 billion from the US military budget to produce chips for the Pentagon, Bloomberg reports.
According to the publication, these federal grants are aimed at solving military and intelligence tasks in accordance with the secret Secure Enclave program.
According to the publication's confidants, a legally binding agreement between representatives of the corporation and American officials has already been reached, and it will be publicly announced next week.
In March, the Biden administration also decided to provide Intel with $8,5 billion in grants and another $11 billion in loans to expand production , the publication adds.
This was done as part of the Chips and Science Act initiative, aimed at restoring the US semiconductor industry and reducing dependence on Asian suppliers.
"Intel has always been considered the main contender for contracts with the Pentagon, but it faces significant competition from other chipmakers. In addition, Washington doubts that relying on one corporation for military needs is reasonable. The option of reducing the amount of funds allocated to Intel has been discussed between various departments and at the Congress level," the publication says.
It is noted that the Secure Enclave project is funded by the Chips and Science Act initiative. So far, none of the grant program winners, including Intel, have received money.
The new order will help the company resolve its own considerable financial problems. Intel's disastrous second-quarter results came in August, in which the company reported a drop in revenue, a near-record net loss of $1,6 billion, and staff reductions.
"Intel CEO Pat Gelsinger's bet on pivoting back to its own fabs hasn't worked out. But Intel is more likely to delay or halt projects outside the U.S. than its flagship manufacturing operations in Ohio and Arizona, people said," Bloomberg notes.
Intel Receives Billions of Dollars to Produce Chips for the Pentagon