Intel Corp. is officially eligible for up to $3.5 billion in federal funding to produce semiconductors for the Pentagon, according to people familiar with the matter, after the chipmaker reached a binding agreement with US officials.

The secret Secure Enclave programme aims to create advanced chips for military and intelligence purposes. It covers several states, including a manufacturing plant in Arizona, Bloomberg reported.

While Intel was always the front-runner to win the award, other chip makers resisted, concerns arose in Washington about the wisdom of relying on a single company, and a funding battle between multiple agencies and Capitol Hill threatened to cut Intel’s overall award.

The funding could be announced as early as next week, said the people, who declined to be named because the discussions are confidential. The funding would be in addition to the $8.5 billion in grants and $11 billion in loans Intel received in March under the Chips and Science Act, legislation signed into law by President Joe Biden in 2022 to revitalize US semiconductor manufacturing and reduce dependence on Asia.