Intel to get $3.2 billion government grant for new $25 billion Israel chip plant

Intel to get $3.2 billion government grant for new $25 billion Israel chip plant

JERUSALEM :Israel’s government agreed to give Intel Corp a $3.2 billion grant for new $25 billion chip plant it plans to build in southern Israel, both sides said on Tuesday.

The news comes as Israel remains locked in a war with Palestinian terrorist group Hamas in the wake of the Oct. 7 Hamas attack on Israel.

The expansion plan for its Kiryat Gat site is a “important part of Intel’s efforts to foster a more resilient global supply chain, alongside the company’s ongoing and planned manufacturing investments in Europe and the United States,” Intel said in a statement.

In addition to the grant that amounts to 12.8 per cent of the total investment, the chipmaker also pledged to buy 60 billion shekels ($16.6 billion) worth of goods and services from Israeli suppliers over the next decade, while the new facility is expected to create several thousand jobs.

Intel runs four development and production sites in Israel, including a manufacturing plant in Kiryat Gat, and employs nearly 12,000 people in the country.

In June, Prime Minister Benjamin Netanyahu said Intel would build a new $25 billion chip plant in Israel but Intel until now had refused to confirm the investment.

Yet Intel said construction work is already under way for the growth of the site, including clean rooms and support buildings. A major portion of the buildings, including the casting of piles and first floors, has been completed, it said.

The new plant is expected to open in 2027 and operate through 2035.

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