Intel Corp. said on Monday that it’s eligible to receive as much as $3 billion in US government funding to manufacture chips for the military.

The effort, called the Secure Enclave, aims to establish a steady supply of cutting-edge chips for defense and intelligence purposes. The award is separate from a possible $8.5 billion grant from the 2022 Chips and Science Act that would support Intel’s commercial factories across four US states. In a separate statement Monday, Intel said that those projects continue to make progress.

Intel shares rose 6.4% to $20.91 Monday on the news. The stock remains down 58% this year.

Lawmakers set aside $3.5 billion in March for the military program as part of the Chips Act, which aims to boost the American semiconductor industry and reduce reliance on Asia. The $3 billion agreement with Intel covers Secure Enclave funding appropriated to the Commerce Department for fiscal years 2024 and 2025, which started July 1.

Commerce is responsible for the broader Chips Act grant program, but the Defense Department will actually handle the Secure Enclave award, according to a joint statement from the two agencies. That money will be disbursed in two phases, a US official said.

The remaining $500 million for Secure Enclave will be appropriated to Commerce in fiscal year 2026, according to bill text from March. Intel has long been the sole intended beneficiary of the program, as Pentagon officials have insisted on getting advanced chips from an American supplier.

In reaching the agreement announced Monday, Commerce relied on the Defense Department’s assessment that Intel is uniquely qualified to achieve the program’s aims and requirements, said the official, who asked not to be identified because the deliberations were private. “Today’s announcement highlights our joint commitment with the US government to fortify the domestic semiconductor supply chain,” Chris George, president and general manager of Intel Federal, a subsidiary of Intel focused on government work, said in a statement. The Departments of Defense and Commerce said in a joint statement that the award will “build on Intel’s work with the DoD and will further strengthen our national security.”