Intel has received a $3.2 billion grant from the Israeli government to build a new chip fabrication facility in southern Israel. This investment of $25 billion is the largest ever made by the company in a manufacturing facility. The purpose of Intel's expansion is to strengthen global semiconductor supply chains and reduce dependence on specific regions such as Taiwan. The new Fab 38 plant will be constructed alongside Intel's existing Fab 28 facility in Kiryat Gat. Construction has already begun and operations are scheduled to begin in 2028, continuing until 2035. The project is expected to create numerous local job opportunities. In addition, Intel will benefit from a reduced corporate tax rate of 7.5% and has committed to $16.6 billion in local procurement. It is worth noting that this grant comes at a time when Israel is facing ongoing conflict with the Palestinian militant group Hamas.
Despite the current situation, Intel's long-standing presence and investments in Israel demonstrate the company's commitment to economic priorities. The country's labs have played a crucial role in the design of Intel's key processor technology. The expansion in Kiryat Gat aligns with Intel CEO Pat Gelsinger's strategy of diversifying manufacturing through significant investments in the US, Europe, and Israel. This follows the company's previous $20 billion fab project in Ohio. With substantial government subsidies at each location, Intel aims to regain market dominance against competitors like AMD and Nvidia by leveraging the scale of its manufacturing capabilities. The new Israeli fab will complement Intel's cutting-edge technologies and contribute to Israel's reputation as a global hub for semiconductors.
