The Chips Act sees the Biden administration grant Intel up to $3 billion.

• Under the CHIPS and Science Act, the Biden administration granted Intel up to $8.5 billion in March.

On Monday, the Biden Administration granted up to $3 billion under the CHIPS and Science Act for the "Secure Enclave" program, aimed at increasing the production of microelectronics for the U.S. Department of Defense.

Intel's foundry business may receive outside funding through the creation of a separate entity, resulting in an 8% increase in shares during extended trading.

In a recent meeting with Commerce Secretary Gina Raimondo, Intel CEO Pat Gelsinger expressed frustration over the heavy reliance of U.S. companies on Taiwan Semiconductor Manufacturing, the world's largest contract chipmaker.

The "Secure Enclave" program is the latest collaboration between Intel and the Department of Defense, which involves projects to create Rapid Assured Microelectronics Prototypes (RAMP) and State-of-the-Art Heterogeneous Integration Prototypes (SHIP).

— CNBC's Seema Mody and Rohan Goswami contributed to this story.