Unveiling Intel's Groundbreaking $25 Billion Project: The Israeli government has agreed to give technology giant Intel a $3.2 billion grant for a new $25 billion chip plant. Intel plans to build the plant in southern Israel.
Israel and technology company Intel said in a statement on Tuesday that this is the largest investment by a single company in Israel to date. The development comes at a time when Israel is at war with Hamas after the October 7 attack on Israel by the Palestinian militant group Hamas.
It is seen as a show of support from a major American company, but at the same time, Washington is under increasing pressure on Israel to take steps to reduce civilian casualties in Gaza.
According to the Reuters news agency, Intel said in a statement that the expansion plan for the Kiryat Gat site in Israel is in line with the company's ongoing and planned manufacturing investments in Europe and the United States, as well as promoting a flexible global supply chain. Giving is an important part of Intel's efforts.
Intel says it already has a chip plant at the Kiryat Gat site. The site is 42 kilometers from Hamas-controlled Gaza.
It should be noted that in June of this year, Israeli Prime Minister Binyamin Netanyahu said that Intel would build a new $25 billion chip plant in Israel. But Intel had refused to confirm the investment until before the announcement.
Intel has announced big plans under CEO Pete Gelsinger to regain its dominance in chipmaking and better compete with rivals AMD, Nvidia and Samsung. Intel has invested billions in building factories on three continents. The new Israeli plant is the US chipmaker's latest investment in recent years.
Daniel Benatar, the company's vice president, says the support from the Israeli government will ensure Israel remains a global center for semiconductor technology and talent.
It should be noted that Intel had previously received Israeli grants of about two billion dollars over the past 50 years in other facilities there.
Ofir Yousefi, deputy director general of the Israel Investment Authority, has said that Intel chose higher grants and tax rates over an offer of lower grants and lower tax rates.
He told Reuters that the grant process took months because such a grant required a review and an independent analysis of whether it was economically viable. According to him, it is certain that Israel will get a lot of financial and economic benefits from this investment.
Intel, which will invest for the next five years, will pay a corporate tax rate of seven and a half percent instead of the previous five percent. The general tax rate in Israel is 23 percent, but companies receive large benefits due to incentives under Israeli law to invest in development sectors.
Israeli Finance Minister Bezalel Smotrich says the investment comes at a time "when Israel is fighting a war against absolute evil. A war in which good must defeat evil."
It should be noted that in the year 2022, Intel said that it will invest 100 billion dollars in the US state of Ohio for possibly the world's largest chip manufacturing complex.
Similarly, Intel rivals Samsung, and Taiwan Semiconductor Manufacturing Company (TSMC) have also announced major investment plans in the US.
This grant constitutes 12.8% of the total investment. In addition, Intel has also committed to purchase $16.6 billion worth of goods and services from Israeli suppliers over the next decade. Similarly, thousands of jobs are also likely to be created from the new factory.
Intel is one of about 500 multinational companies in Israel. Intel has been in Israel since 1974 and operates four development and production sites there. These sites include a manufacturing plant in Kiryat Gat known as Fab 28.
This plant produces Intel 7 technology or 10-nanometer chips. It has around 12,000 employees in the country while indirectly employing more than 42,000 people.
Intel did not say what technology it will develop at the new Fab 38 plant. However, the company says that the construction of the plant has already started.