Israel called Intel’s investment an ‘important and significant’ one given that the country is at war against ‘absolute evil.’
Intel will receive a $3.2 billion grant from the Israeli government in exchange for investing $25 billion in the country for chip development.
The $3.2 billion
grant announcement came as Intel said it was bumping up
investment in its Kiryat Gat facility
located in southern Israel by $15
billion. Back in 2019, the company said it would invest $10 billion in the facility. With Intel now hiking the
investment to $25 billion, the $3.2 billion government grant would make up 12.8 percent of the total investment. The multi-billion dollar grant will not be
given to Intel in one go. Instead, it will be transferred over several years, with the company obligated to meet certain milestones.
In addition to the grant, Intel also committed to
purchasing 60 billion shekels’ ($16.6 billion) worth of goods and services from suppliers in Israel over a period of 10 years.
With the new investment, Intel intends to upgrade and expand the Kiryat Gat wafer fabrication site, located just 26 miles from the Gaza region. Kiryat Gat, also called Fab 28, manufactures Intel’s 10-nanometer chips.
Intel has not said what technology will be produced at the new plant. Dubbed Fab 38, it is scheduled to start operations in 2028 and run through 2035.
Construction
activities have already begun. The new fab at the site will use Intel’s unique ultraviolet lithography production process and the company has already ordered special machines from the Netherlands for this purpose.
The expansion of Kiryat Gat is an “important part of Intel’s efforts to foster a more resilient global supply chain, alongside the company’s ongoing and planned manufacturing investments in Europe and the United States,” the company
said in a statement, according to Reuters.
Intel set up operations in Israel in 1974 and currently employs 11,700 people
directly in the country, which includes 3,900 workers in manufacturing and 7,800 in development. Indirectly, the company employs
another 42,000 people. The $25 billion investment is expected to create thousands of new jobs.
Intel in Israel
Intel’s investment in Israel comes as the country is in the midst of war against the Hamas terrorist group. Finance Minister Betzalel Smotrich
called the $25 billion investment an “important and significant” development for the country, according to The Times of Israel.
“Such an investment, at a time when Israel is facing a war against absolute evil, a war in which good is obliged to defeat evil … is an expression of confidence in the State of Israel and the Israeli economy.”
In mid-December, Intel CEO Pat Gelsinger
said that many of their employees in the country were on reserve duty due to the war.
“We have over 20,000 souls … between our direct employees and contractors and construction workers. And about 17 percent of them are on reserve duty today. We’ve lost several in the conflict from the family, and some of our members have lost their children, and we still have some hostages,” he said in a Dec. 13 interview with Fox News.
“We’ve supported our teams financially, emotionally … The Israeli people are the most resilient people on earth. They have not missed a single wafer commitment or product commitment despite the conflict. That’s why we believe so deeply in them.”
Intel’s $25 billion investment is the
largest by any company in Israel, according to the finance ministry. The $3.2 billion in grants announced by the Israeli government is the
biggest ever that has been awarded to a private company.
In addition to the Kiryat Gat facility, Intel runs three more
operations in Israel—a communications, software, and cyber security development center in Jerusalem; a communication and artificial intelligence (AI) solutions development center in Petah Tikvah; and a hardware and software development center for processors and AI in Haifa.
Chip Investments
Intel’s $25 billion bet in Israel is the latest in a series of chip manufacturing
investments the company has announced in recent years.
Last year, Intel said it will
invest up to $100 billion in Ohio to potentially build the biggest chip-making complex in the world. As part of this, an initial $20 billion investment was
announced on a 1,000-acre site in New Albany.
“These factories will create a new epicenter for advanced chipmaking in the U.S. that will bolster Intel’s domestic lab-to-fab pipeline and strengthen Ohio’s leadership in research and high tech,” Mr. Gelsinger
said in a statement at the time.
In June this year, Intel revealed
plans to invest up to $4.6 billion in a new semiconductor assembly and test facility in Poland. The facility is expected to be live by 2027 and will employ 2,000 workers.
The same month, Intel
signed a deal with the German government to invest over 30 billion euros ($32.8 billion) in a chip manufacturing facility in the city of Magdeburg. The German government promised to cover a third of the investment.
The German economy minister called it the “biggest investment ever made by a foreign company in Germany.” Two semiconductor facilities are planned for the site, with the first one projected to kick off production in four to five years.
