Intel has confirmed intentions to construct a $25 billion chipmaking factory in the southern part of the country, calling it the most significant investment in Israel's history.

The Goal of Intel's Expansion

Intel, the American tech giant, plans to invest $25 billion in expanding its chipmaking factory in Kiryat Gat despite the ongoing war between Israel and Hamas, according to Israel's finance minister Bezalel Smotrich's post in X on Tuesday. Smotrich sees this investment as crucial, especially during a time when Israel is confronting a war against absolute evil, interpreting it as an expression of confidence in the State of Israel and its economy.

The investment is expected to generate high-quality jobs in remote areas, boosting productivity and making a substantial contribution to the growth of the Israeli economy. Netanyahu initially announced the new factory in June, highlighting it as the largest-ever investment by an international company in Israel.

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Intel's Confirmation on Expansion

Intel did not officially confirm the new investment at the time. They stated that their operations in Israel were vital to their success, and any expansion plans were driven by a commitment to fulfill future manufacturing needs. Plans were only confirmed on Tuesday, as Daniel Benatar, co-general manager of Intel Israel, expressed pride in the growth of the Kiryat Gat manufacturing facilities, attributing it to the unwavering commitment of Intel's Israeli employees to excellence. Benatar stated that support from the Israeli government would allow Intel to build on this excellence further, ensuring that Israel continues to be a global hub for semiconductor technology and talent.

The chipmaker's expansion plan seeks to regain its leadership in the semiconductor industry, improve supply chain resilience in geopolitical tensions, and strengthen Intel's ability to procure materials and chips globally. The business declared 2022 that it would invest $20 billion in two new U.S. chip manufacturing facilities and $90 billion in new European factories.

$3.2 Billion Grant for Plant Expansion

According to Israeli media, the Israeli government will grant $3.2 billion for the Kiryat Gat plant expansion, to be distributed over several years. In the coming decade, Intel has pledged to purchase goods and services totaling $16.6 billion from Israeli suppliers.

Construction expansion had begun with a substantial portion of the buildings already completed and is expected to open in 2028 and run through 2035, according to the news agency. Intel has four development and production sites in Israel, with Kiryat Gat being its most advanced manufacturing facility.

In 2017, Intel acquired Mobileye, a driver-assist technology startup in Israel, for $15.3 billion before taking it public just a year ago. In February 2022, Intel revealed intentions to acquire Israeli chipmaker Tower Semiconductor for $5.4 billion, which was canceled earlier this year due to the failure to secure necessary regulatory approvals, with China's antitrust regulator not granting clearance, according to reports. 

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