Israel’s government has approved a $3.2 billion grant for US chipmaker, Intel’s, upcoming $25 billion chip plant in southern Israel, which marks the largest-ever investment by a company in the country.
The announcement comes amid Israel’s ongoing hostilities with Palestinian militant group Hamas, and it showcases a significant display of support by a major US company during a period of increased pressure on Israel to minimise civilian casualties.
Intel’s expansion plan for its Kiryat Gat site, located 42 km from Gaza, is part of the chip company’s broader strategy to strengthen the global supply chain. The investment follows Intel’s recent multibillion-dollar commitments to build chip-making facilities in Europe and the United States under CEO Pat Gelsinger’s leadership.
The new plant in Israel is expected to contribute to Intel’s efforts to compete with rivals such as AMD, Nvidia, and Samsung. Beyond Israel, Intel is set to invest over 30 billion euros ($33 billion) in developing two chip-making plants in Magdeburg, Germany, as part of an investment drive in Europe. The company has also pledged up to $100 billion for a potential world’s largest chip-making complex in Ohio.
Intel’s investment in Israel, especially during ongoing conflicts, is seen as a vote of confidence in the country’s economy. The grant, amounting to 12.8% of the total investment, is accompanied by commitments to purchase $16.6 billion worth of goods and services from Israeli suppliers over the next decade. The new facility is anticipated to generate several thousand jobs.
Intel has had a presence in Israel since 1974, and it currently operates four development and production sites in the country. The new Fab 38 plant, scheduled to open in 2028 and operate through 2035, is poised to make a significant impact on Israel’s high-tech sector and contribute to the country’s economic growth.