Intel expected to announce $3.5bn military foundry contract

Intel, which is currently strapped for cash, is expected to announce this week that it has been awarded a $3.5 billion foundry contract for the military, reports Bloomberg.

The award comes under a programme called Secure Enclave which is administered by the US Department of Commerce (DoC) which also administers the US Chips Act which awarded Intel $19.5 billion in grants and loans but has not, so far, paid any of it to Intel.

Secure Enclave is aimed at producing a domestic source of advanced ICs for the military and intelligence services. Giving the contract to Intel shows that the US government has decided that Intel is only viable US domestic source of such chips which suggests that the government will not let Intel fail in its bid to regain cutting edge chipmaking capability

Intel is currently completing two fabs in Arizona – fabs 52 and 62 – which are expected to run Intel’s 18A process next year which is intended to give the company process technology leadership.

If the process yields in high volume then Intel’s foundry business will attract some high-spending customers. The DoC is said to have put pressure on Nvidia and AMD to use the 18A process.

The military contract comes after Intel held a three day board meeting last week to discuss options for raising cash to fund its fab-building following bad Q3 figures which made many question the sustainability of Intel’s recovery programme .