Intel confirms additional $15 billion investment in Israeli chip plant
Intel confirms additional $15 billion investment in Israeli chip plant
Israel's government agreed to give Intel a $3.2 billion grant for the new plant in Kiryat Gat, with the chipmaker also committed to buying over $16 billion worth of goods and services from Israeli suppliers over the next decade
Intel will increase its planned investment in the establishment of a new chip factory in Kiryat Gat in Israel by $15 billion, and is expected to invest $25 billion in total in its construction, the chip giant confirmed on Tuesday.
The Ministry of Finance announced the expected investment in June, but this is the first time Intel has officially confirmed it.
Israel's government agreed to give Intel a $3.2 billion grant for the new plant in Kiryat Gat, which according to Intel 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."
In addition to the grant that amounts to 12.8% of the total investment, the chipmaker also committed to buy 60 billion shekels ($16.6 billion) worth of goods and services from Israeli suppliers over the next decade, while the new facility is expected to create several thousand jobs.
Intel operates four development and production sites in Israel, including a manufacturing plant in Kiryat Gat, and employs nearly 12,000 people in the country.
In June, Prime Minister Benjamin Netanyahu said Intel would build a new $25 billion chip plant in Israel but Intel until now had declined to confirm the investment.
Yet Intel said construction work is already under way for the expansion of the site, including clean rooms and support buildings. A significant portion of the buildings, including the casting of piles and first floors, has been completed, it said.
The new plant is due to open in 2027 and operate through 2035.
In a conversation with Calcalist, Daniel Benatar, Co-General Manager of Intel Worldwide Semiconductor Manufacturing, and Co-General Manager Intel Israel, explained that the new plant will be able to produce the most advanced chips, meeting the needs of companies like Apple and Nvidia. "The plant supports the new strategy to produce products for both Intel and essential customers, and it will be part of the continuous supply chain that Intel is building for very advanced chips. Israel is a very central part of this issue," he said.
According to Benatar, Intel has a significant commitment to Israel, unaffected by the current war. "Just a week ago, CEO Pat Gelsinger was interviewed in the U.S. and said that the war had no effect, especially considering Intel's significant and long presence in Israel," he said. "We are saddened by what happened, but it has no effect on our investment. On the contrary, it is Intel's global expression of confidence in Israel and Intel Israel. It is a commitment based on a long-standing friendship. There is something special here that was created in the south."
Benatar also referred to the unique status of Israel for Intel, the only country outside the U.S. where the company has both development and strategic production activities: "There is something special here in the State of Israel. Leading universities in the world, people with motivation for enormous success, audacity, and Israeli creativity. You combine all these things, and it brings success stories both in the world of design and in the world of production."
