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Intel Corporation has reportedly been awarded a $3.5 billion contract to produce advanced semiconductor chips for the U.S. military as part of the Pentagon’s efforts to secure critical chip supplies. This contract comes under the Secure Enclave program, aimed at bolstering the production of cutting-edge chips at Intel’s Arizona facility. The deal reflects the growing need for secure and resilient supply chains for military and intelligence technology amidst global geopolitical tensions.
Despite competition from rival chipmakers and concerns over the reliance on a single manufacturer, Intel was selected as the preferred company for this high-stakes project. The agreement comes as part of broader federal efforts under the CHIPS and Science Act, designed to increase domestic semiconductor manufacturing capacity. In addition to the $3.5 billion deal, Intel is in talks about securing an additional incentive package that includes $8.5 billion in grants and $11 billion in loans to bolster its facilities in Arizona, Ohio, New Mexico, and Oregon.
This new contract adds to Intel’s ongoing efforts to expand its semiconductor footprint. Earlier this year, the company secured $1.91 billion in state grants from Poland to construct a new chip plant, receiving strong support from the European Commission. Intel’s global efforts align with its long-term goal of enhancing its semiconductor production, software revenue, and capacity to support critical sectors.
The Pentagon deal, expected to be officially announced next week, highlights the strategic importance of secure chip production, especially as military and intelligence technologies become more reliant on advanced semiconductors. This contract further underscores Intel’s vital role in supporting the U.S. government’s efforts to secure domestic semiconductor production capabilities amidst escalating tensions in global technology supply chains.