Israel grants $3.2 billion to Intel for its new $25 billion chip plant

Israel grants Intel $3.2 billion for a $25 billion chip plant near Gaza, demonstrating support amid conflict. The investment enhances Intel’s global supply chain resilience. The company, led by CEO Pat Gelsinger, expands operations in Europe and the U.S. Intel commits to significant purchases from Israeli suppliers and job creation.

Israel grants $3.2 billion to Intel for its new $25 billion chip plant
Intel Kiryat Gat Photo: Eyal Izhar

Intel’s $25 Billion Investment in Israel: A Show of Confidence in a Global Chip Race

In a move that signals both strategic ambition and confidence in Israel’s tech sector, Intel has announced a monumental $25 billion investment to build a new chip factory in Kiryat Gat, southern Israel. This marks the largest investment ever by a company in the country and comes amidst a global race to secure chip production capacity.

Investing in the Future: Building a Resilient Global Supply Chain

This expansion plan, dubbed Fab 38, is a key part of Intel’s strategy to diversify and strengthen its global chip production. Under CEO Pat Gelsinger, the company has embarked on an aggressive expansion drive, investing billions in new factories across Europe and the United States. The new Israeli plant joins Intel’s recent investments, including the $33 billion project to build two chip plants in Germany and the potential $100 billion complex in Ohio.

A Shot in the Arm for Israel’s Economy and Tech Sector

Beyond its strategic significance for Intel, the project represents a major boost for Israel’s economy and tech scene. The Israeli government has pledged a $3.2 billion grant, amounting to 12.8% of the total investment, highlighting its commitment to attracting high-tech giants. Additionally, Intel has committed to purchasing $16.6 billion worth of goods and services from Israeli suppliers over the next decade, further strengthening local businesses.

Creating Jobs and Opportunities: A Catalyst for Progress

The new facility is expected to create thousands of high-paying jobs in Kiryat Gat, contributing significantly to the region’s economic development. This investment, particularly during a period of global competition for chip production, is seen as a strong endorsement of Israel’s skilled workforce and innovative ecosystem.

Intel’s Deep Roots in Israel: A Longstanding Partnership

Intel has been a major player in Israel’s tech landscape for decades, with a presence since 1974. It currently operates four development and production sites, including the existing Fab 28 plant in Kiryat Gat, and employs nearly 12,000 people directly and 42,000 indirectly. Intel’s exports account for a significant portion of Israel’s high-tech exports, with the company playing a crucial role in the nation’s technological success.

Looking Ahead: A Future of Innovation and Collaboration

The Fab 38 project is expected to begin operation in 2028 and remain active until at least 2035. While Intel remains tight-lipped about the specific technology that will be produced at the new facility, its commitment to research and development is evident. With three R&D centers and a strong presence in the self-driving technology sector through the acquisition of Mobileye, Intel is poised to continue driving innovation in Israel.

Beyond the Numbers: A Symbol of Confidence and Collaboration

This landmark investment transcends economic figures and speaks volumes about the growing confidence in Israel’s tech ecosystem. It signifies a strong partnership between a global tech giant and a nation known for its innovative spirit. As the global chip race intensifies, Intel’s commitment to Israel sends a clear message: together, they are ready to build a more resilient and technologically advanced future.

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Source(s): Reuters; Times of Israel

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