Intel to receive $3.2 billion government funding for new $25 billion chip factory in Israel

Intel to receive $3.2 billion government funding for new $25 billion chip factory in Israel
Intel to receive $3.2 billion government funding for new $25 billion chip factory in Israel

The Israeli government has agreed to provide Intel Corp. with $3.2 billion toward the construction of its $25 billion chip factory, which is slated to be built in southern Israel.

Intel Corp. (INTC.O.) has agreed to receive a $3.2 billion grant from the Israeli government for its planned $25 billion chip facility to be built in southern Israel, the parties announced on Tuesday.

The announcement is made as Israel is still embroiled in combat with the militant Palestinian organization Hamas following the latter’s attack on Israel on October 7.

In a statement, Intel stated that the Kiryat Gat expansion plan is a “significant component of the company’s efforts to foster a more resilient global supply chain, in addition to the company’s ongoing and planned manufacturing investments in Europe and the United States.”

Apart from the grant, which represents 12.8% of the entire investment, the chipmaker has pledged to purchase goods and services valued at 60 billion shekels ($16.6 billion) from Israeli suppliers over the next ten years. It is anticipated that the new plant will generate several thousand jobs.

Intel employs about 12,000 people in Israel, where it runs four production and development facilities, including a facility in Kiryat Gat.

Although Intel has not yet confirmed the investment, Prime Minister Benjamin Netanyahu said in June that the company will construct a new $25 billion chip facility in Israel.

However, Intel stated that work has already begun on the site’s expansion, which will include support structures and clean rooms. It stated that a large amount of the buildings, including the first floors and pile casting, have been finished.

The new plant is scheduled to begin operations in 2027 and run until 2035.

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