(Bloomberg) — Intel Corp. said Monday that it is eligible for up to $3 billion in U.S. grants to make chips for the military, confirming an earlier report by Bloomberg.

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The project, called “Secure Enclave,” aims to ensure a steady supply of cutting-edge chips for defense and intelligence purposes. Lawmakers have allocated $3.5 billion for the program as part of the Chips and Science Act 2022, which aims to strengthen the American semiconductor industry and reduce dependence on Asia. The grant is separate from a potential $8.5 billion grant from the Chips Act that Intel is set to receive to support commercial factories in four U.S. states.

Intel shares rose as much as 6.5 percent to $20.94 on Monday after the news was announced. By the close of trading on Friday, the stock had lost 61 percent this year.

Previously: Intel closes $3.5 billion deal to make chips for the military

“Today’s announcement underscores our shared commitment with the U.S. government to strengthen the domestic semiconductor supply chain,” said Chris George, president and general manager of Intel Federal, an Intel subsidiary focused on government work, in a statement. The Department of Defense and the Department of Commerce said in a joint statement that the award “will build on Intel’s work with the Department of Defense and further strengthen our national security.”

According to the joint statement, the Pentagon will conduct the award under an agreement between the Department of Defense and the Department of Commerce, which is responsible for the broader Chips Act grant program.

The $3 billion agreement covers funding lawmakers approved in March for fiscal years 2024 and 2025, which begin July 1. The remaining $500 million for Secure Enclave would be approved in fiscal year 2026, according to the bill.

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