Israeli Government to Grant $3.2 Billion for Intel’s $25 Billion Chip Facility in the Country
In Brief
The Israeli government approved a $3.2 billion grant for Intel to support the construction of its $25 billion chip manufacturing plant.
In a major development amid the ongoing Israel-Hamas conflict, the Israeli government officially approved a $3.2 billion grant for Intel to support the construction of a state-of-the-art $25 billion chip manufacturing plant in southern Israel.
Scheduled to open in 2027, the newly established plant set to be built in Southern Israel will be operational until 2035, as reported by Reuters.
Intel has labeled the expansion plan for its existing Kiryat Gat (a city in the Southern District of Israel) site as a crucial element of its broader strategy to enhance the resilience of the global supply chain.
The company further emphasized that this initiative complements its existing and planned manufacturing investments in Europe and the United States.
In a statement, Intel conveyed its commitment to the project, highlighting that the grant constitutes 12.8% of the total investment, accompanied by an additional commitment to procure goods and services worth $16.6 billion from Israeli suppliers over the next decade. The new facility is anticipated to generate several thousand jobs.
According to reports, Intel currently operates four development and production sites in Israel, including a manufacturing plant in Kiryat Gat, employing nearly 12,000 people in the country. While Prime Minister Benjamin Netanyahu had announced in June that Intel would construct a new $25 billion chip plant in Israel, the company had refrained from confirming the investment until now.
Despite previous silence on the matter, Intel revealed that construction work is already in progress for the site’s expansion, encompassing clean rooms and support buildings.
Israel’s Tech Industry Holds Ground Amid War
Last month, Sony Semiconductor Israel talked to Metaverse Post and shared how despite the ongoing war, the chip company with the dedication of its employees both in Israel and globally, does not anticipate any disruption to its business operations.
“Our Israeli management is actively involved and lends a hand in day-to-day activities when people are absent, and we receive significant support from our teams abroad. This is the spirit of our company and our country – we help each other and deliver no matter the circumstances,” Dima Feldman, VP of Product Management and Marketing, at Sony Semiconductor Israel told Metaverse Post.
Feldman elucidated on the logistical aspects, emphasizing that the company’s core operations, including chip manufacturing, testing and assembly, are executed beyond Israel’s borders, ensuring their continued functionality irrespective of local circumstances. He further highlighted Sony’s adept resource management, strategically distributing assets between Israel and other nations to effectively cater to customer needs.
The tech sector is responsible for over half of the country’s exports and nearly a fifth of its overall economic output, faced heightened uncertainty.
Before the conflict, funding had already experienced a significant decline amid a global economic slowdown and a contentious government judicial overhaul. The war further exacerbated the economic impact. The growth trajectory, initially set at a 3.4% rate for the year, has now dwindled to an expected 2%, with a bleak outlook for the foreseeable future.
In 2023, Israeli startups have managed to secure over $6 billion in funding even in adverse conditions, as indicated by several media reports. The figure is lower than the $16 billion raised in the preceding year, but it shows the resilience of the industry amid ongoing geopolitical challenges. It will be interesting to observe the scenario post-war to understand the pace of growth for the tech industry in the country.
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Kumar is an experienced Tech Journalist with a specialization in the dynamic intersections of AI/ML, marketing technology, and emerging fields such as crypto, blockchain, and NFTs. With over 3 years of experience in the industry, Kumar has established a proven track record in crafting compelling narratives, conducting insightful interviews, and delivering comprehensive insights. Kumar's expertise lies in producing high-impact content, including articles, reports, and research publications for prominent industry platforms. With a unique skill set that combines technical knowledge and storytelling, Kumar excels at communicating complex technological concepts to diverse audiences in a clear and engaging manner.
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Kumar is an experienced Tech Journalist with a specialization in the dynamic intersections of AI/ML, marketing technology, and emerging fields such as crypto, blockchain, and NFTs. With over 3 years of experience in the industry, Kumar has established a proven track record in crafting compelling narratives, conducting insightful interviews, and delivering comprehensive insights. Kumar's expertise lies in producing high-impact content, including articles, reports, and research publications for prominent industry platforms. With a unique skill set that combines technical knowledge and storytelling, Kumar excels at communicating complex technological concepts to diverse audiences in a clear and engaging manner.
