Abigail Klein Leichman
December 27, 2023

Intel has confirmed reports, first floated half a year ago, that it plans to build a new chip factory in the southern Israeli town of Kiryat Gat, where it already has a foundry called Fab28.

The California-based international company, one of the world’s largest semiconductor chip manufacturers, said the planned addition is an “important part of Intel’s efforts to foster a more resilient global supply chain, alongside the company’s ongoing and planned manufacturing investments in Europe and the United States.”

A chip fabrication plant, or fab, is expensive to build. Israel’s government will kick in $3.2 billion toward the construction, as the new facility will create thousands of employment opportunities.

“Squeezing billions of tiny transistors onto ever-smaller computer chips requires one of the most complex manufacturing processes humans have devised. A fully equipped new fab costs about $10 billion and takes 6,000 construction workers about three years to complete,” according to the company.

Intel will invest a total of $25 billion. This amount includes a commitment to purchase some $16.6 billion worth of goods and services from Israeli suppliers over the next decade.

The new plant, to specialize in producing advanced chips for companies such as Apple and NVIDIA, is due to open in 2027.

Intel Israel, helmed by Yaniv Garty, was founded in 1974 in Haifa as Intel’s first development center outside the United States. In 1981, Intel established its first factory outside the United States, in Jerusalem.

Today, Intel Israel claims to be the largest private employer in the Israeli high-tech. It has development centers in Haifa, Petah Tikva and Jerusalem as well as the Fab28 in Kiryat Gat that produces the chips inside most of the PCs in the world.

“As one of the leading companies in the Israeli market, we are committed to contribute to local economic development. We do this through our 11,700 employees plus additional 42,000 in indirect employment, through our significant procurement of products and services from local suppliers, and through exports of $8.7 billion in 2022, representing 5.5% of the hi-tech exports from Israel,” according to Intel Israel’s newsroom.

In August, Intel announced that it would not go through with a planned $5.4 billion acquisition of Israeli company Tower Semiconductor due to issues with Chinese regulators.

However, Intel is historically a strong M&A partner for Israel, having acquired Mobileye, Habana Labs, Cnvrg, Granulate and Screenovate.

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