Intel to receive up to $3 billion under the CHIPS Act

The Biden administration awarded on Monday Intel up to an additional three billion dollars under the CHIPS and Science Act for the “Secure Enclave” program, which is intended to expand the supply of microelectronics to the US Department of Defense.

Intel shares rose 8% in extended trading after the company said it would create a separate unit for its foundry business that could enable it to raise external funding.

Intel is building foundry facilities in four states as part of its project to increase domestic semiconductor production for other suppliers. In March, the Biden administration awarded Intel up to $8.5 billion under the CHIPS and Science Act. A senior administration official told CNBC that the disbursements were expected by the end of the year.

Intel CEO Pat Gelsinger expressed his frustration at the heavy dependence of American companies on Taiwan Semiconductor Manufacturing, the world's largest contract chip maker, during a recent meeting with Commerce Secretary Gina Raimondo, CNBC reported Thursday.

The Secure Enclave program is the latest development in the relationship between Intel and the U.S. Department of Defense and includes projects to build Rapid Assured Microelectronics Prototypes (RAMPs) and State-of-the-Art Heterogeneous Integration Prototypes (SHIPs).

Intel's continued push for funding from the Biden administration reflects its mission to “strengthen the domestic semiconductor supply chain and ensure the United States maintains its leadership in advanced manufacturing, microelectronics systems and process technology,” said Chris George, president and general manager of Intel Federal, in the press release.

Intel has lost 60 percent of its value this year as it struggles to compete in the booming artificial intelligence market. In August, the company announced it would cut 15 percent of its workforce as part of a $10 billion cost-cutting plan.

— CNBC's Seema Mody and Rohan Goswami contributed to this story.