Intel Announces Record-Breaking $25 Billion Investment in Israeli Chip Facility

The Israeli government and Intel have officially announced their joint venture to construct a $25 billion chip making facility in the southern region of the country. 

Prime Minister Benjamin Netanyahu has characterized this investment as the largest in Israel’s history.

Despite the recent attacks on October 7 and the ongoing conflict between Israel and Hamas, the American tech giant, which already employs 11,700 individuals in Israel and has invested over $50 billion in the country over the past 50 years, remains determined to expand its existing chip making factory in Kiryat Gat, located approximately 16 miles northeast of Gaza. 

In June, Prime Minister Netanyahu unveiled the new factory, characterizing it as the “largest investment ever by an international company in Israel.” 

While Intel (INTC) did not confirm the investment at that time, it underscored the significance of its Israel operations to the company’s overall success. 

The expansion plans were motivated by a commitment to address future manufacturing requirements. Subsequently, the company officially confirmed the investment plans on Tuesday.

Intel’s Kiryat Gat Expansion Boosts Global Sourcing

Intel has outlined that the expansion initiative at the Kiryat Gat site is integral to enhancing its global sourcing capabilities for materials and chips. 

The company is making substantial investments to reclaim its leadership in the semiconductor industry and fortify supply chains in response to escalating geopolitical tensions. 

In 2022, Intel announced a $20 billion investment for the construction of two new chip making facilities in the United States and up to $90 billion for the establishment of new factories in Europe.

According to reports from Israeli media, the Israeli government will contribute a grant of $3.2 billion for the phased expansion of the Kiryat Gat plant.

Additionally, Intel has committed to procuring goods and services valued at 60 billion shekels ($16.6 billion) from Israeli suppliers over the next decade, as reported by Reuters, citing the company’s official statement.

Construction activities have commenced to facilitate the expansion of the site, with a substantial portion of the structures already completed, as reported by the news agency.

The anticipated inauguration of the new plant is slated for 2028, and it is expected to remain operational until 2035.