Intel will assist the U.S. military in producing advanced chips to ensure local production.

(Reuters) – Intel Corp said on Friday it had won a second phase contract for a joint project with the U.S. military to help it produce more advanced semiconductors in the U.S. But Intel declined to disclose the exact amount of the contract.

Intel will assist the U.S. military in producing advanced chips to ensure local production.

Under the project, Intel will use its own semiconductor packaging technology at its plants in Arizona and Oregon to help the military develop chip prototypes, the report said. This packaging technology integrates “chiplets” from different vendors into one package, enabling more functionality to be integrated into a smaller finished product while reducing its energy consumption.

“As more and more semiconductor production migrates overseas, the Department of Defense is very interested in ensuring that advanced microelectronics are produced in the U.S. to serve national security,” Bob Swan, Intel’s chief executive, told Reuters in an interview. “

Intel’s partnership with the U.S. Department of Defense coincides with U.S. officials focusing on boosting domestic semiconductor manufacturing in response to China’s rise as a strategic competitor, Reuters said. Currently, 75 percent of the world’s chip production capacity is in Asia, and many of the most advanced plants are in Taiwan and South Korea, which Reuters says are within range of Chinese and North Korean forces.

“One of the areas where we can have a broad impact on China is the return of microelectronics.” Alan Lord, the Pentagon’s chief weapons buyer, said Thursday during testimony before the Senate Armed Services Committee.