Chipmaking giant Intel, may just be selected for producing microchips for the military. The US government is in the process of completing their due diligence and readying a billion dollar investment that will make it a landmark deal in the company’s history.
The investment will allow Intel to build a secure manufacturing plant in the US, shifting the fabrication units from East Asia, where there is a risk of Chinese espionage and invasion. Producing microchips for the military is a big deal, and the application for which these chips will be made, is varied.
The funding is part of the Chip act, in which the goverment has pledged close to $52 billion to produce electronics in the US, and also upgrade the research capabilities in-house. For those of you who don’t know, the Chips and Science Act is a federal statute that was approved last year, Under this program, the goverment will be making significant investments in an effort to shift semiconductor manufacturing back to the US from East Asia, as well as producing electronics in-house. This has been something that was being discussed for some time, but it looks like the goverment has decide to make its moves now.
This investment into Intel has raised a few eyebrows, as competitors in the market feel that there may be an element of bias towards the chipmaker and that the government may be putting all their eggs in the Intel basket, which could be detrimental for competition, and could lead to a stagnation in the market.
It will be interesting to see how this investment pans out and whether the US government will go for Intel exclusively or invest in a few competitors to bring in some competition and trigger some innovation from chipmakers.
