Intel Secures Historic $3.25 Billion Israeli Government Grant for $25 Billion Chip Fab Investment Amid Regional Tensions

In a groundbreaking move, Intel has unveiled plans to construct a state-of-the-art semiconductor fabrication facility, Fab 38, in Israel, marking the largest foreign investment ever witnessed by the country. The tech giant will receive a substantial $3.25 billion grant from the Israeli government to facilitate the construction of this cutting-edge manufacturing facility, with operations set to commence in 2028. The move is a pivotal component of Intel’s overarching strategy to diversify its global supply chain and establish leading-edge fabs across various continents, including the U.S., Europe, and the Middle East.

The new facility, strategically located near Kiryat Gat, approximately 42 kilometers from the Gaza Strip, underscores Intel’s commitment to fostering a more resilient global supply chain. Expected to operate until 2035, Fab 38 will incorporate extreme ultraviolet (EUV) lithography, showcasing Intel’s dedication to advanced process technologies. However, the specific process technologies that the facility will support remain undisclosed.

Intel’s statement on the matter emphasizes the significance of Fab 38 in fortifying the company’s global supply chain resilience. This investment aligns with Intel’s ongoing and planned manufacturing ventures in Europe and the United States, further solidifying its foothold in key regions.

The new investment is poised to elevate Intel’s operations in Israel, where the company currently manages four development and production sites, including the notable Fab 28 plant in Kiryat Gat. The latter, operating on Intel 7 process technology (also known as 10nm Enhanced SuperFin), employs approximately 12,000 individuals and indirectly supports an additional 42,000 jobs. Fab 38 is expected to generate several thousand additional jobs, contributing significantly to the local economy.

As part of its commitment to the Israeli market, Intel has pledged to procure goods and services valued at 60 billion shekels (approximately $16.6 billion) from local suppliers over the next decade. This strategic move not only bolsters Intel’s presence in Israel but also enhances the country’s high-tech exports.

The construction of Fab 38 represents a landmark collaboration between Intel and the Israeli government, fostering technological advancement, job creation, and economic growth. With operations set to commence in 2028, Intel’s investment underscores the company’s confidence in Israel’s technological ecosystem amid ongoing regional tensions.

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