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After a veritable litany of adverse developments that have continued to hammer its stock over the past couple of weeks, Intel has finally received a rare piece of encouraging news courtesy of a secretive program under the auspices of the US Department of Defense (DOD), which can play a pivotal role in anchoring the plummeting sentiment around the embattled company.
Intel $INTC has officially qualified for as much as $3.5 billion in federal grants to make semiconductors for the 🇺🇸 Military - Bloomberg pic.twitter.com/zs1f1INlew
— Evan (@StockMKTNewz) September 13, 2024
To wit, as per the reporting by Bloomberg, Intel has now signed a binding agreement under the secretive "Secure Enclave" program of the US DOD, one that will see the chip manufacturer receive $3.5 billion in federal grants to incentivize the manufacturing of advanced semiconductors for strategic defense needs.
Of course, this development comes as the CHIPS Act grants, which constitute a major source of lucrative federal funding for Intel, appear to be in jeopardy. As we reported recently, Intel is slated to receive $8.5 billion in grants and $11 billion in loans under the CHIPS Act, conditional on establishing a qualifying manufacturing footprint on US soil as part of the Biden administration's efforts to re-shore the chip industry. Intel, however, has reportedly failed to meet preliminary expectations of the Biden administration, leading to protracted negotiations that have frustrated the embattled company.
Meanwhile, Intel is preparing to pitch a broad-based revival plan at its upcoming board meeting, which reportedly includes plans to unload its majority stake in its FPGA arm, Altera, institute a construction freeze on its $30 billion facility in Germany, and a possible sale of its Foundry division to Qualcomm.
Also, to conserve cash, Intel has slashed its dividends and laid off 13.6 percent of its workforce strength (as of the start of the year) of around 110,000 employees. The company has also cut its capital spending for 2025 by 17 percent to just $21.5 billion.
Intel shares are up ~1 percent in after-hours trading on this DOD-related news. So far this year, however, the stock is down a whopping 59 percent.
About the author: Writing is my one incontrovertible passion. Over the past six years, he has authored over 2,200 distinct articles on financial and tech-related topics, spanning nearly 1 million words. And he has been a member of Wcctech mobile team since 2025. As an alumnus of the University of Toronto, Rotman Commerce Program, I bring nuance, in-depth knowledge, and a unique perspective to every topic that I cover. When I'm not writing, I'm traveling the world, exploring hidden confectionaries and restaurants as an aspiring food connoisseur.
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