Israel Grants Intel $3.2 Billion for New $25 Billion Chip Plant
In a groundbreaking move, the Israeli government has agreed to provide Intel Corp with a generous $3.2 billion grant for the construction of a new $25 billion chip plant in southern Israel.
This investment marks the largest ever made by a company in Israel and demonstrates a significant show of support from a major U.S. corporation.
The decision comes at a crucial time as Israel continues to face conflict with the Palestinian militant group Hamas. The grant from Intel is seen as a strong endorsement of Israel's economy and a display of confidence in the country's ability to attract substantial investments.
Intel's shares have already seen a positive response, with a 1.9% increase in pre-market Nasdaq trading, reaching $48.90.
The new chip plant, located in Kiryat Gat, approximately 42 km (26 miles) from the Hamas-controlled Gaza, is a strategic move by Intel to strengthen its global supply chain. The company aims to enhance its chip-making capabilities and compete more effectively with rivals such as AMD, Nvidia and Samsung.
Under the leadership of CEO Pat Gelsinger, Intel has been investing billions of dollars in building factories across Europe, the United States and now Israel. This latest investment in Israel follows Intel's plans to spend over 30 billion euros ($33 billion) on two chip-making plants in Magdeburg, Germany.
The Israeli government has expressed its appreciation for Intel's investment, highlighting the significant economic benefits it will bring to the country. In addition to the grant, Intel has committed to purchasing 60 billion shekels ($16.6 billion) worth of goods and services from Israeli suppliers over the next decade. The new facility is expected to create several thousand jobs, providing a boost to the local economy.
Intel has had a presence in Israel since 1974 and currently operates four development and production sites in the country. Its manufacturing plant in Kiryat Gat, known as Fab 28, employs nearly 12,000 people directly and indirectly supports an additional 42,000 jobs. Intel's exports from Israel account for 5.5% of the country's total high-tech exports.
The new chip plant, called Fab 38, is scheduled to open in 2028 and operate until 2035.
Israel grants Intel a $3.2 billion grant for a new $25 billion chip plant.
The investment is the largest ever made by a company in Israel.
The grant demonstrates support for Israel's economy and confidence in attracting significant investments.