Intel wins second phase of contract to help Pentagon develop new chips

Platform News: Intel logo on a retail window in the US

Intel Corp has said it has won a second-phase contract at a project aimed at helping the American military make more sophisticated semiconductors within the US.

Under the project, Intel Corp will help the military develop prototypes of chips with its semiconductor packaging technologies at factories in Arizona and Oregon. The packaging technologies allows pieces of chips called “chiplets” from different providers to be combined into a single bundle, helping cram more features into a smaller finished item whilst lowering its energy consumption.

“As more and more semiconductor manufacturing has moved offshore, the (Department of Defence) is very interested in ensuring that they have advanced microelectronics for national security manufactured here in the US,” Bob Swan, Intel’s chief executive, told journalists at our partner news agency Reuters in an interview as he toured a recently completed $7 billion mill growth in Arizona, where Intel’s workforce totals 12,000.

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Intel declined to disclose a dollar amount for its portion of the contract, which has been controlled by the Naval Surface Warfare Center, Crane Division. Intel won a portion of the first phase of the contract in 2019.

Intel’s work with the Defence Department comes as US officials focus on fostering domestic semiconductor manufacturing in reaction to the rise of China as a strategic rival. About 75% of the planet’s chipmaking capability is in Asia, with a lot of their most advanced plants in Taiwan and Korea, in the reach of the Chinese and North Korean militaries.

“I think one of the areas where we can have the most impact on China broadly is re-shoring microelectronics,” Ellen Lord, the Pentagon’s chief weapons buyer, informed that the U.S. Senate Armed Services Committee in a hearing on Thursday.

Intel is among 3 companies in the world that can make highly advanced computer chips. The other two – Taiwan Semiconductor Manufacturing Co Ltd and Samsung Electronics – possess packaging technologies very similar to Intel’s.

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However, Intel has been working on the tech longer and can conduct the job in the US, and also the other two can’t, said Dan Hutcheson, CEO of VLSI Research.

“There’s no one else with the mix of technology that they have in the United States,” he explained.

“Packaging is a big win for them.”

Together with Washington’s relations with Beijing in their worst in years, US officials have broken down on suppliers to Chinese companies such as Huawei, with brand new rules on the 15th of September barring most US businesses from selling into the Chinese telecommunications giant. Intel confirmed last month it has licenses to maintain providing some goods.

Swan said that global marketplace access was “very important” to assisting Intel generate the cash needed to build chip factories, known as “fabs” in the industry.

The team at Platform Executive hope you have enjoyed this news article. Initial reporting via our official content partners at Thomson Reuters. Reporting by Stephen Nellis in Chandler, Arizona and Mike Stone in Washington. Editing by Greg Mitchell, Lisa Shumaker and David Gregorio.

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