Intel announces plan for new $25 billion manufacturing facility in Israel

Intel’s office in Jerusalem, May 18, 2016. Photo by Yonatan Sindel/Flash90.

(JNS) — Intel Israel and Israeli government authorities on Dec. 26 announced plans to build a new manufacturing facility in Kiryat Gat.

“The global company Intel’s choice to approve the unprecedented investment of $25 billion right here, in Israel, is important and significant,” according to a joint statement by Israeli Finance Minister Betzalel Smotrich, the Israeli Economy Ministry and Israel Tax Authority.

“Such an investment, at a time when Israel is facing a war against absolute evil, a war in which good is obliged to defeat evil… is an expression of confidence in the State of Israel and the Israeli economy,” said Smotrich.

The Intel Corporation is an American multinational corporation and one of the world’s largest and most prominent semiconductor chip manufacturers.

Under the terms of the agreement, Israel will provide Intel with a $3.2 billion grant over several years. Intel will undertake to hire thousands of Israeli high-tech workers, and also buy products and services from Israeli companies and contractors. The company’s obligation to meet these goals are a condition for receiving the grant.

The new factory is expected to begin operating in 2028, and to remain in operation at least until 2035.

“This is an expression of great confidence in the Israeli economy and exactly reflects the strength of the free economy that we have built here, and the technological economy that we are developing here,” Israeli Prime Minister Benjamin Netanyahu said in June of the prospective investment.

According to Intel Israel’s Corporate Responsibility Report published that month, the company posted record exports of $8.7 billion in 2022, accounting for 1.75 percent of Israel’s GDP and 5.5 percent of Israeli high-tech exports.

The company employs around 10,000 people in Israel directly and another 30,000 indirectly. The chip-making giant has one plant already in operation in Kiryat Gat and is currently constructing another plant there at an investment of $10 billion.

In a statement earlier this year, Intel said that its Israel operations “played a crucial role” in its global success.

“Our intention to expand manufacturing capacity in Israel is driven by our commitment to meeting future manufacturing needs… and we appreciate the continued support of the Israeli government,” the company said.

Intel’s involvement in Israel began in the 1970s when it established its first development center in Haifa. Over the years, Intel has expanded its presence in Israel with multiple R&D facilities in Haifa, Jerusalem and Petah Tikvah.

These centers are involved in developing and designing advanced technologies for various products, including processors, chipsets, communication technologies and software.