Intel has the potential to be selected to receive several billions dollars US government funding to produce microchips for military and intelligence application, new reports have claimed.
According to the Wall Street Journal, the funds will assist in building a secure facility for the production of the microchips as a means to reduce imports from areas in East Asia under threat from Chinese espionage and invasion.
The funding comes as part of the Chips Act, a $53 billion project to produce domestic electronics such as semiconductors and also enhance the research capabilities of the US.
Tax credits in exchange for chips
The Chips and Science Act (Creating Helpful Incentives to Produce Semiconductors) is a bipartisan federal statute approved last year, providing several hundred billions dollars worth of funding to companies to secure domestic production of semiconductors for both military and intelligence use.
The facilities built by Intel would be designated a ‘secure enclave’ to manufacture chips for military application to lessen the impact of a Chinese invasion of Taiwan, where the US imports a significant number of its chips.
While no final decisions have been made, “people familiar with the situation” have told the Wall Street Journal that the cost of the facilities could be between $3 billion to $4 billion. These funds would be secured from grants set aside within the Chips Act specifically designated for manufacturing, which make up around $39 billion of the total chips funding.
This investment has been designated as a “national security investment” by Commerce Secretary Gina Raimondo, but the decision to potentially award such a large amount of the funding to a single company has seen bipartisan criticism. There are worries that the Chips Act could be putting all of its eggs in the Intel basket, with little funding left over for other manufacturers to diversify the market.
The Taiwan Semiconductor Manufacturing Company (TSMC) has also voiced concerns surrounding US government subsidies it is due to receive for building a manufacturing plant in Arizona. TSCM announced the construction plans in 2020 but has since run into significant cost issues and problems with talent acquisition for personnel qualified to manufacture its semiconductors.