The Israeli government has committed to providing a $3.2 billion grant to Intel (NASDAQ:INTC)Corp for its planned $25 billion chip manufacturing facility in southern Israel, as announced by both parties on Tuesday.
This development is concurrent with the ongoing conflict between Israel and the Palestinian militant group Hamas, following an attack by Hamas on Israel on Oct. 7.
The information is from Reuters.
Intel’s expansion of its Kiryat Gat site is a strategic move to enhance the resilience of the global supply chain. This initiative is in line with the company’s investments in manufacturing in Europe and the United States, as Intel highlighted in their statement.
The grant represents 12.8% of the total investment for the project. Intel has also pledged to purchase goods and services worth 60 billion shekels (approximately $16.6 billion) from Israeli suppliers over the next ten years. The new facility is anticipated to generate several thousand jobs.
Intel’s presence in Israel includes four development and production sites, one of which is a manufacturing plant in Kiryat Gat, employing close to 12,000 people.
Although Prime Minister Benjamin Netanyahu announced in June that Intel would establish a new $25 billion chip plant in Israel, the company had not confirmed the investment until now.
Construction for the site expansion, including clean rooms and ancillary buildings, is already underway. A considerable part of the structure, such as the casting of piles and initial floors, is reportedly complete.
The new plant is scheduled to open in 2027 and is expected to be operational until at least 2035.