Intel confirms $3 billion more in federal aid to produce chips for the military

Intel has won another federal grant worth up to $3 billion as it continues work on its $28 billion project in Licking County.

The computer chip company said Monday that the new round of funding is for the U.S. government's Secure Enclave program in which Intel will produce semiconductors for the military.

The award is in addition to a preliminary award of $8.5 billion in grants and $11 billion in low-cost loans that Intel received in March from the federal CHIPS and Science Act that was passed in 2022. The legislation also comes with a 25% federal tax credit.

Intel also is collecting more than $2 billion in incentives from the state and New Albany .

The CHIPS Act provides $52.7 billion in federal aid to restore manufacturing of the tiny devices to the U.S. considered vital to the economy and the military that has been largely shipped overseas in past decades.

Intel says it is the only American company that designs and manufactures leading-edge logic chips used in advanced technologies.

“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,” Chris George, president and general manager of Intel Federal, said in a statement.

"America needs a domestic producer of the most high-tech chips that are essential for our national security," Lt. Gov. Jon Husted said. "Right now we don’t have that domestic supply chain. ... What Intel is doing is good for Ohio."

In the first CHIPS award made a year ago, the Defense Department handed out $238 million to establish eight of what it calls Microelectronics Commons regional innovation hubs across the country, including $24.3 million for the Midwest Microelectronics Consortium , a multistate initiative led by Ohio. The initiative is dedicated to advancing research and production of semiconductors for the defense industry.

"Ohio has a strategy to be part of the Department of Defense solution in the sector,’’ Husted said.

Intel has said the federal and state money is necessary to help finance its building spree in Ohio, Arizona, New Mexico and Oregon as part of the effort to return production of the most advanced semiconductors to the U.S.

Still, it's been two years since the CHIPS Act was passed and, to this point, none of the money has been awarded to Intel. The Commerce Department says it is working out final details of the award with Intel and other companies that have received funding and that it expects money to start going out by the end of the year.

That's too long for Husted.

"We fall behind every day that China is investing in their chip industry and we're not investing in ours," he said.

This new award comes weeks after Intel announced that it was cutting 15% of its workforce, or about 15,000 jobs, as part of a $10 billion global restructuring.

Since then, reports around the company have been swirling about what other steps Intel plans to take to get its finances back in order besides cutting staff.

Reports have suggested that the company is considering shutting down projects and selling or splitting up the company. An announcement on the company's plans could come as soon as this month.

Construction continues to ramp up at the Ohio site with an expected completion of the factories by 2026-27 and a goal of them becoming operational in 2027-2028.

mawilliams@dispatch.com

@BizMarkWilliams

This article originally appeared on The Columbus Dispatch: Intel confirms $3 billion more in federal aid to produce chips for the military