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Chip giant Intel has landed a contract with the Defense Ministry to manufacture advanced microchips through its contract manufacturing unit. It is a big victory in a year of attempts at recovery by the company.
ArisMessinis / AFP via Getty Images
Intelligence
said on Monday it had entered into a U.S. Department of Defense pact for an undisclosed sum to manufacture advanced microchips through its manufacturing unit under contract for the first phase of a larger program.
Intel stock (ticker: INTC) gained 2.4% to close at $ 53.23 in Monday’s regular session, as the
PHLX Semiconductor Index
(SOX) rose 2.6%.
The Intel contract is part of a Defense Department effort to use US-based chipmakers to manufacture the chips needed for mission-critical systems, which has attracted increased interest amid a global chip shortage. The drought has exposed how much the United States and other countries depend on a handful of manufacturers for the chips that power everything from personal computers to various vehicle components.
According to Intel, the company’s Foundry Services unit will join companies such as
International Business Machines
(IBM),
Synopsis
(SNPS) and others, in the Commercial Rapid Assure Microelectronics Prototypes program, known as RAMP-C. The goal of the program is to support US chipmakers so that there is an adequate supply of parts for critical Department of Defense systems.
Intel CEO Pat Gelsinger said Intel is the only US company capable of both designing and manufacturing the most advanced processors. “One of the most profound lessons from the past year is the strategic importance of semiconductors and the value for the United States of having a strong domestic semiconductor industry,” Gelsinger said in a statement. prepare.
Obtaining the contract from the Ministry of Defense marks a first victory for Intel’s foundry services business. Intel launched the new initiative earlier this year, as part of its broader commitment to tackle some of the manufacturing issues that have enabled competitors such as
Semiconductor manufacturing in Taiwan
(TSM) to usurp its unique dominance. Intel’s plans include $ 20 billion to build two new factories in Arizona.
In recent weeks, reports have revealed that Intel was in talks with U.S. chipmaker GlobalFoundries for a $ 30 billion acquisition, a deal that would boost Intel’s contract chip business in several ways. However, Reuters reported that the owners of the company, Mubadala Investment, the investment arm of the Abu Dhabi government, are considering listing the company on the stock exchange.
Write to Max A. Cherney at [email protected]
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