Intel to halt $25 billion Israel chip facility

Despite being in line to receive $3.2 billion in subsidies, Intel has paused the construction of a chip plant in Israel

Jun 11, 2024 - 14:50

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Intel to halt $25 billion Israel chip facility

Intel has reportedly halted construction on a $25 billion chip manufacturing factory in the Israeli city of Kiryat Gat.

The plant was being constructed as part of Intel’s investment to diversify and increase the resilience of its global supply chain, having previously relied heavily on semiconductor manufacturers in Taiwan for its supply of high-end chips.

In a statement (via The Register), the company stated that “Israel continues to be one of our key global manufacturing and R&D sites and we remain fully committed to the region. As we've previously noted, the scope and pace of Intel's manufacturing expansion at our sites around the world depends heavily on various factors.”

Plant construction put on hold

“Managing large-scale projects, especially in our industry, often involves adapting to changing timelines. Our decisions are based on business conditions, market dynamics and responsible capital management,” the company stated.

Intel confirmed its commitments to Israel, where the chip giant employs almost 12,000 workers.

The latest build to be canceled was subject to receive $3.2 billion in Israeli government subsidies, with The Register suggesting that, by citing capital management as a cause for pause, Intel could be trying to figure out how to pay for the project in the meantime.

How long the project will be kept on pause for is unconfirmed, but it is not the first time Intel has had to put a project on pause in order to figure out its funding. In 2022, the company also canceled plans for a $200 million research and development center in Haifa, Israel.

Intel is planning to establish itself as the second largest global chip maker by 2030, with the company itself and the US government providing substantial capital via the CHIPS Act to diversify semiconductor manufacturing outside of Taiwan, especially as China steps up its rhetoric of reunification.