The undisclosed facilities would be designated as a "secure enclave" to reduce the military's dependence on chips imported from East Asia, particularly Taiwan, which is at risk of a future invasion from China.
The funding for the new facilities would come from the $52.7 billion allocated under the Chips Act, signed into law by President Biden in August 2022.
The Chips Act, which had bipartisan support, promotes chipmaking and scientific research through funding and tax credits.
The law is aimed at encouraging domestic manufacturing of semiconductors and helping US companies compete with China in developing cutting-edge technologies.
A good bet for Chipzilla's super-secret facilities is its Arizona factory complex. The exact amount of funding that will be made available is not yet known, but "people familiar with the situation" tell the Journal that they could cost about $3 billion to $4 billion, which would come from the $39 billion set aside in the Chips Act for manufacturing grants.
Officials from the Commerce Department, the Office of the Director of National Intelligence and the Defense Department are negotiating the project with Intel but have not yet made a final decision.
The first manufacturing grants under the Chip Act will be announced in the coming weeks. The programme was reported to have had more than 500 entities express interest, and more than 130 have submitted applications or pre-applications for funding.