The Pentagon has decided to rely on an Abu Dhabi-owned company to supply the most advanced microchips used in U.S. spy satellites, missiles and combat jets. A senior U.S. Defense Department official said in an interview that the Pentagon has reached a seven-year agreement with Globalfoundries Inc., one of the big four global chip makers, to supply the microchips. Terms weren’t disclosed.
The agreement ends months of uncertainty over supplies of such chips but is just the first step in a broader effort to protect sensitive military systems from cyberattacks and other tampering. Globalfoundries last year acquired from International Business Machines Corp. the two plants—in Burlington, Vt., and East Fishkill, N.Y.—that make the chips. IBM had been the near-monopoly supplier of the chips to the Pentagon for more than a decade and paid Globalfoundries $1.5 billion to take the unprofitable business off its hands. READ MORE