The Biden Administration on Monday awarded Intel up to an additional $3 billion under the CHIPS and Science Act for the “Secure Enclave” program which is designed to expand the supply of microelectronics for the U.S. Department of Defense.
Shares of Intel jumped 8% in extended trading after the company announced it’s creating a separate entity for its foundry business, which could allow it to raise outside funding.
Intel is building foundry plants in four states as part of its project to increase domestic semiconductor manufacturing for other suppliers. In March, the Biden administration awarded Intel with up to $8.5 billion under the CHIPS and Science Act. A senior government official told CNBC that disbursements are expected by the end of the year.
Intel CEO Pat Gelsinger, in a recent meeting with Commerce Secretary Gina Raimondo, voiced frustration over the heavy reliance that U.S. companies have on Taiwan Semiconductor Manufacturing, the world’s largest contract chipmaker.
The “Secure Enclave” program is the latest development in the relationship between Intel and the Department of Defense, which includes projects to build Rapid Assured Microelectronics Prototypes (RAMP) and State-of-the-Art Heterogeneous Integration Prototypes (SHIP).
Intel’s continued push for funding from the Biden administration reflects its mission “to fortify the domestic semiconductor supply chain and to ensure the United States maintains its leadership in advanced manufacturing, microelectronics systems, and process technology,” Chris George, president and general manager of Intel Federal, said in the press release.
Intel has lost 60% of its value this year as it struggles to find its way in the booming artificial intelligence market. The company announced in August it would cut 15% of its workforce as part of a $10 billion cost-reduction plan.
— CNBC’s Seema Mody and Rohan Goswami contributed to this story.