Both parties announced on Tuesday that the Israeli government had authorized Intel Corporation (INTC.O.) to receive a grant of $3.2 billion to construct a new chip facility that will cost $25 billion and be located in southern Israel.
The revelation comes at a time when Israel is still at war with the Palestinian militant group Hamas over the attack that Hamas carried out on Israel on October 7.
Intel stated that the expansion plan for its Kiryat Gat location is “an important part of Intel’s efforts to foster a more resilient global supply chain.” This is in addition to the company’s existing and planned manufacturing expenditures in Europe and the United States.
Along with the grant that accounts for 12.8% of the overall investment, the chipmaker has also committed to purchasing goods and services from Israeli suppliers for sixty billion shekels, equivalent to sixteen and a half billion dollars, over the next ten years. Additionally, the new facility is anticipated to generate several thousand employment opportunities.
Intel is responsible for developing and producing four locations in Israel, including a manufacturing plant in Kiryat Gat. The company employs close to 12,000 people in Israel.
In June, Benjamin Netanyahu, the Prime Minister of Israel, said that Intel would construct a new chip facility in Israel that would cost $25 billion. However, Intel has, as of yet, declined to confirm the investment.
Despite this, Intel has stated that construction work has already begun to expand the plant, including the construction of support buildings and clean rooms. According to the report, a sizeable section of the buildings has been finished, including the casting of piles and the first floors. A new plant will begin operations in 2027 and continue until 2035.
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