What we can gauge from Intel's $3B military chip grant
The exterior of Intel's corporate headquarters in Santa Clara, California. Photo by Justin Sullivan / Getty Images
By
Ross Wilkers
This agreement has two signposts: how the U.S. government views semiconductors as core to restoring the country's tech leadership and the company involved.
By borrowing a term from my favorite card game, I can start out with my periodic reminder that the U.S. government is essentially going all-in on chips and making more of them here.
If all goes according to plan, the U.S. will restore the position it wants to lead the world in semiconductor manufacturing and translate that to being Country No. 1 in all of technology.
Few signposts make that clear like Monday’s announcement that Intel will receive $3 billion in direct CHIPS and Science Act funding to expand the U.S. government’s trusted network of where it buys semiconductors.
Intel will work under the Defense Department’s Secure Enclave program, which DOD set up to accelerate the manufacturing of chips for defense and intelligence use within highly-secure environments.
BAE Systems' U.S. subsidiary was the first recipient of grants from CHIPS and Science Act in December 2023. But the pact with Intel takes the conversation to a different level, given this global company has written much of the tech industry's history.
Intel's Secure Enclave work is separate from a proposed funding agreement the company and the Biden-Harris administration signed in March, where the company would receive $8.5 billion in funding and $11 billion in loans to build and upgrade its commercial semiconductor facilities.
Either way, the nature of this particular technology we are talking about and the company involved shows criticality on both ends.
Chips are inherently a dual-use technology and vital to everything of importance in the world, while Intel is a crucial member of the U.S.’ tech ecosystem. Intel is also in the midst of a turnaround effort being led by CEO Pat Gelsinger, whose vision for making it work depends on factory investments worldwide.
Intel’s work with DOD started in 2020 when the company signed onto the SHIP program that focused on new chip packaging methods.
The company also has participated in the RAMP-C program since 2021, where it provides commercial foundry services to develop custom circuits for military systems.
Boeing, Northrop Grumman, Microsoft, IBM and Nvidia also are examples of Intel’s customers across the defense industrial base as they need chips for the systems they make for government clients.
Now with an even more direct relationship, Intel and the U.S. government are counting on each other more so than ever before.
"Intel is proud of our ongoing collaboration with the U.S. Department of Defense to help strengthen America's defense and national security systems," Chris George, president and general manager of Intel’s federal division, said in a release. "Today's announcement highlights our joint commitment with the U.S. government to fortify the domestic semiconductor supply chain and to ensure the United States maintains its leadership in advanced manufacturing, microelectronics systems, and process technology."
The Secure Enclave pact with Intel is the newest example of how the Commerce Department has been at work over the past 12 months to make awards out of the $52 billion "CHIPS For America" program.
As of Monday: Commerce’s CHIPS Program Office has announced $32.5 billion in grant awards and up to $28.8 billion in loans to 17 companies across 26 projects in 16 states.
If all goes according to plan, maintaining leadership in those areas will translate into the same in others for the U.S.
A clear verdict on that outcome, and the commitment Intel and the U.S. have made to each other, will not be seen for years.
Below is a CNBC report aired Monday after Intel confirmed its Secure Enclave award.