Deal marks largest-ever investment in Israel, as Intel continues global expansion.
Israel has announced a $3.2 billion grant to Intel Corp to support the construction of a new $25 billion semiconductor plant in southern Israel. The agreement, disclosed on Tuesday, underscores the Israeli government’s commitment to fostering high-tech industries, despite the ongoing conflict in Gaza, which has resulted in significant casualties since October 7. The deal comes amid global calls for boycotts of Israel and its business partners due to the ongoing occupation of Palestinian territories.
The partnership between Intel and Israel signals strong support from a leading US company, with Intel also agreeing to purchase 60 billion shekels ($16.6 billion) worth of goods and services from Israeli suppliers over the next decade. The new facility, expected to generate several thousand jobs, reflects Intel’s ongoing expansion in the region.
Historic Investment and Economic Impact
Israeli Prime Minister Benjamin Netanyahu, who first revealed details of the deal in June, praised the agreement as “unprecedented” and the largest investment in Israel’s history. Intel currently operates four development and production sites in Israel, including a manufacturing plant in Kiryat Gat, located just 42 kilometers from Gaza. The company’s Kiryat Gat site, which produces Intel 7 technology chips, plays a key role in Intel’s global supply chain resilience efforts, alongside other manufacturing investments in Europe and the United States.
New Facility and Future Prospects
The new chip plant, known as the Fab 38 facility, is set to open in 2028 and will operate through 2035. Intel’s expansion in Israel is a critical part of its broader strategy to restore its position as a leader in semiconductor production, competing with rivals like AMD, Nvidia, and Samsung. While Intel has not disclosed the specific technologies to be produced at the new facility, the plant’s construction has already begun.
The Israeli government sees the Intel deal as a testament to the country’s economic strength and resilience, especially in light of the global competition to secure semiconductor investments. Finance Minister Bezalel Smotrich emphasized the importance of the investment, calling it a symbol of the values of progress and righteousness amid the ongoing conflict.
Intel’s Longstanding Presence in Israel
Intel’s relationship with Israel dates back to 1974, and the company has since become a significant player in the country’s tech sector. Intel’s exports account for a substantial portion of Israel’s high-tech export value. The company’s acquisition of Israeli self-driving car tech firm Mobileye in 2017 for $15.3 billion further solidified its commitment to the region.
Intel CEO Pat Gelsinger’s recent investments in global manufacturing facilities demonstrate the company’s commitment to re-establishing dominance in the semiconductor industry, and the new Israeli plant is a crucial part of this long-term strategy.
