Intel Corporation has announced a momentous investment in Israel, underscoring the strong economic ties between the U.S. and Israel. The company is set to build a new $25 billion chip plant in southern Israel, backed by a substantial $3.2 billion grant from the Israeli government. This move, representing the largest single investment by a company in Israel, comes amid ongoing tensions with the Palestinian militant group Hamas.
The investment is seen as a significant vote of confidence in the Israeli economy, particularly during a period of global competition in the chip industry. Intel's expansion at its Kiryat Gat site, located near Hamas-controlled Gaza, aims to bolster the global supply chain, complementing its investments in Europe and the U.S.
@intel CEO: Israelis are the most resourceful people in the world. We have employees there who were killed, lost family members, are serving in the reserves, but Intel Israel hasn't missed a single target. pic.twitter.com/AZsRUuNeQm
ā benwaxman (not a parody) (@benwaxman) December 22, 2023
Under CEO Pat Gelsinger's leadership, Intel is aggressively expanding its global footprint to regain its position as a leading chipmaker. This includes major investments in Europe and a planned $100 billion chip-making complex in Ohio. The Israeli plant adds to Intel's growing list of global projects.
The Israeli finance and economy ministries have lauded this investment as a testament to the nation's economic resilience and a significant fiscal benefit that outweighs the state's grant. Finance Minister Bezalel Smotrich emphasized the investment's alignment with Israel's ongoing battle against what he termed "utter wickedness," framing it as a support for progress and righteous values.
"Close to Gaza" is very misleading. 20 miles from Gaza basically covers half of Israel. Intel have those FABs in Kiryat Gat since 1996, it's nothing new. They are upgrading them to newer technology for more advanced chips - they have to upgrade them as technology improves. https://t.co/fAxOo9KmCf
ā Alex_A š (@Alex753429) December 26, 2023
Intel's commitment extends beyond the plant construction. The company plans to procure goods and services worth 60 billion shekels ($16.6 billion) from Israeli suppliers over the next decade, creating thousands of jobs. Intel's significant presence in Israel since 1974 includes several development and production sites and a major role in the nation's high-tech exports.
Meanwhile, despite some disappointment in Mobileye's public valuation when it went public, the Israeli automatic driving technology company, acquired by Intel in 2017, has seen a substantial increase in share value since its IPO. This success story adds to Intel's positive impact on Israel's tech sector.
The new Fab 38 plant, already under construction, is expected to open in 2028 and operate until 2035, further cementing Intel's commitment to Israel's technological and economic landscape.
