According to insiders, after reaching a binding agreement with US officials, Intel has officially received up to $3.5 billion in federal subsidies to manufacture semiconductors for the Pentagon.
The project, named "Secure Enclave," aims to establish a production base for advanced chips used in military and intelligence applications. This project involves multiple states, including a manufacturing plant in Arizona.
Although Intel has always been the leader in receiving this subsidy, other chip manufacturers have raised objections to it, and the United States is also concerned about whether it is wise to rely on one company. The funding war between multiple agencies and Congress may cut Intel's total subsidy.
Insiders say that the funds could be announced as early as next week. In March of this year, Intel received $8.5 billion in grants and $11 billion in loans under the US Chip Act. The bill was signed by President Biden in 2022, aimed at revitalizing the US semiconductor manufacturing industry and reducing dependence on Asia.
Intel is still negotiating a broader incentive plan aimed at supporting its factories in Arizona, Ohio, New Mexico, and Oregon. Like other beneficiaries of the Chip Act, Intel has not yet received any funding, and its fund disbursement is still in the preliminary stage. The funding for the 'Safe Enclave' also comes from the Chip Act grant program managed by the US Department of Commerce, but after earlier disputes over the agency's responsibilities, the funding was not processed through the standard application process.
Intel, the Department of Commerce, and the Pentagon all declined to comment. The White House has not immediately responded to a request for comment.
The achievement of the "Secure Enclave" agreement indicates that despite Intel's recent troubles, the US government still trusts the company to execute the Pentagon's plans. In August of this year, Intel released a poor financial report and revenue forecast, causing a sharp drop in its stock price and weakening confidence in its CEO Pat Kissinger's ambitious turnaround plan, which relies on global factory investments.
There are reports that this chip manufacturer is actively reassessing its manufacturing plans. Although a final decision has not yet been made, informed sources earlier stated that Intel is more likely to postpone or suspend projects outside the United States.
Intel has been working hard to convince potential customers, such as Nvidia and AMD, of its product capabilities. According to reports, US Commerce Secretary Gina Raimondo had encouraged these two companies to consider production at Intel's factory under construction in Ohio, but currently neither of them has any plans.
Intel announced that companies including Microsoft are exploring the idea of using Intel to produce chip designs. However, these efforts have not yet resulted in large orders or significant revenue.
