Pentagon to oversee $3 billion effort to strengthen microchip supply

The Pentagon announced today it will help lead a $3 billion U.S. Commerce Department initiative designed to make sure the U.S. military has access to a reliable domestic microelectronics supply chain.

The first task order under what’s known as the Secure Enclave program was awarded to leading microchip developer Intel Corp. The funding will focus on improving commercial fabrication facilities and builds on work Intel has done through other DOD programs.

The effort is funded through the Biden Administration’s CHIPS and Science Act. Passed in 2022, the measure injects $52 billion into the semiconductor workforce and supports technology and manufacturing advancements needed to establish a more robust domestic microelectronics supply base .

“The Biden-Harris Administration is laser focused on implementing the CHIPS for America programs to bolster national and economic security, including through targeted investments focused on reshoring critical leading edge semiconductor manufacturing production, emerging technology research and development, and current and mature microelectronics,” the White House said in a fact sheet released Monday.

The United States produces just 12% of the global microchip supply – down from around 37% in the 1990s. Today, most of the world’s supply of advanced semiconductors come from Taiwan, and China exports a large portion of its microchips to the United States. These chips power everything from cellphones to cars to the F-35 fighter jet.

The Defense Department received $2 billion in CHIPS Act funding, which it’s using to establish the Microelectronics Commons — a national network of academic institutions, small business firms and research entities working together to push microelectronics technology projects from the laboratory into prototyping and scaled production.

The Secure Enclave project is separate from the Microelectronics Commons and is focused instead on creating an end-to-end production capability that specifically addresses military requirements for advanced semiconductors. DOD will manage the program in partnership with the Commerce Department.

Intel – which has sites in Arizona, New Mexico, Ohio and Oregon -- has been involved in several Pentagon efforts to address microelectronics supply. In 2020 it was selected to participate in DOD’s State-of-the Art Heterogeneous Integrated Packaging Program, which leveraged the company’s production capabilities.

The department selected Intel to provide commercial foundry services through its Rapid Assured Microelectronics Prototypes-Commercial program. The goal of the effort is to demonstrate the ability to securely leverage state-of-the-art microelectronics technologies without depending on a closed security fabrication facility.