2023-12-26 05:02:26 ET
Israel’s government has agreed to grant Intel Corp (NASDAQ:INTC) a substantial $3.2 billion to support the construction of a new $25 billion chip plant in the southern part of the country.
This decision was announced on Tuesday, amidst the ongoing conflict with the Palestinian militant group Hamas following their attack on October 7.
Strategic expansion amidst regional tensions
The grant comes at a time when Israel is deeply involved in conflict with Hamas. Despite the regional tensions, the Israeli government and Intel are moving forward with significant economic investments.
The expansion of Intel’s Kiryat Gat site is considered a vital step in strengthening the global supply chain, complementing Intel’s other manufacturing investments in Europe and the United States.
A boost to Israel’s economy
The new facility is not just a technological advancement for Intel; it also promises substantial economic benefits for Israel.
The chipmaker has committed to purchasing 60 billion shekels (approximately $16.6 billion) in goods and services from Israeli suppliers over the next ten years.
Additionally, the plant is expected to create several thousand jobs, further bolstering the Israeli economy.
Deepening footprint in Israel
Intel’s presence in Israel is already significant, with four development and production sites, including a manufacturing plant in Kiryat Gat. The company employs nearly 12,000 people across these locations.
The announcement of the new chip plant, which had been hinted at by Prime Minister Benjamin Netanyahu in June, confirms Intel’s deepening investment in the region.
Progress on construction and plans
Intel reports that construction for the expansion of the Kiryat Gat site is already underway, including the development of clean rooms and support buildings. A significant portion of the structure, including foundational work, has been completed.
The new plant is scheduled to open in 2027 and is expected to remain operational until at least 2035, marking a long-term commitment to Israel’s technological and economic landscape.
This investment in Israel’s technology sector comes at a critical time, offering a juxtaposition of economic development and innovation against the backdrop of ongoing regional conflicts.
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