Pentagon Grant
The US government is giving Intel a $3.5 billion grant to make specialized chips for the Pentagon. With $19.5 billion coming from the CHIPS Act, Intel will receive a total of $23 billion from the US government.
Although the Pentagon contract will not save Intel, it’s still a win for their foundry business. The contract not only provides Intel Foundry Services with revenue, but it also puts them in the space of making chips for government entities. Barring restrictions from the US government, I wouldn’t be surprised if Intel started making chips for foreign governments that are allied with the US. The foundry business is going to open a lot of doors for the company.
Poland Grant
This week, Intel also got approved for $1.9 billion in state aid from Poland to build their assembly and testing facility in the country. The total cost to build the facility is ~$4.6 billion.
Since Intel is cutting costs, people are concerned that they will scale back their expansion in Poland. I believe it makes sense for them to complete the Poland facility because there is strong demand from outside customers for their advanced packaging business.
Demand for Intel
Intel’s dominance in the PC and server CPU space, along with the money they’re getting from government entities, show that there is demand for the company’s products and services. Intel just needs to stay alive long enough to capture the demand that surrounds them.
Stay strong, stay blessed, and God willing, I will see you next week.
Like cold water to a weary soul is good news from a distant land.
Proverbs 25:25 NIV
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