Intel Receives $3.2 Billion Grant from Israel for New $25 Billion Chip Plant

Intel Corp has been granted a $3.2 billion subsidy from the Israeli government for its upcoming $25 billion chip manufacturing facility in southern Israel. This collaboration between Intel and Israel underscores a significant show of support from a major U.S. company and a substantial offer from the Israeli government, particularly amid heightened tensions in the region.

The grant, representing 12.8 percent of the total investment, is part of Intel’s commitment to building a new chip plant, creating thousands of jobs and fostering a resilient global supply chain. In addition to the subsidy, Intel pledged to purchase goods and services worth 60 billion shekels ($16.6 billion) from Israeli suppliers over the next ten years.

The deal, previously publicized by Israeli Prime Minister Benjamin Netanyahu in June, marks an unprecedented investment in the State of Israel and supports Intel’s efforts to enhance its global manufacturing capabilities. Intel, which already operates four development and production sites in Israel, views the expansion plan for its Kiryat Gat site as a crucial step in achieving a robust supply chain.

The Kiryat Gat manufacturing plant, located 42 km from the Gaza Strip, focuses on producing Intel 7 technology, specifically 10-nanometer chips. With nearly 12,000 direct employees and an additional 42,000 indirect jobs, the plant plays a vital role in Israel’s high-tech landscape.

Intel’s investment comes at a time when Israel is facing international scrutiny due to its ongoing conflict in the Gaza Strip. The financial and economic ministries of Israel view Intel’s commitment as a significant vote of confidence in the country’s economy, emphasizing the direct fiscal benefits that will surpass the state’s grant.

The Fab 38 plant, set to open in 2028 and operate until 2035, represents Intel’s strategic move to restore its dominance in chipmaking globally. The investment aligns with Intel’s CEO Pat Gelsinger’s strategy of building factories across continents to compete effectively with key rivals in the industry, such as AMD, Nvidia, and Samsung.

While the specifics of the technology to be produced at the Fab 38 plant were not disclosed, Intel’s commitment to investing in Israel reinforces the country’s position as a hub for high-tech innovation. The collaborative efforts aim to contribute to progress in humanity, as stated by Israeli Finance Minister Bezalel Smotrich. Intel’s presence in Israel dates back to 1974, and its exports, totaling around $9 billion, contribute significantly to the nation’s high-tech sector.

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