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Intel Invests Additional $15 Billion In Israeli Chip Facility
Intel’s huge investment comes in addition to the $10 billion already committed by the well-known processor company back in 2019.
On Sunday, Israel’s Ministry of Finance announced that the country had reached a new agreement with processor giant Intel that will see $25 billion of investment go towards an updated chip-making facility in Kiryat Gat.
The investment adds another $15 billion on top of the $10 billion earmarked for the proposed factory back in 2019, after the global COVID pandemic delayed construction. The new facility will be significantly more advanced than in the original plans, forming part of a larger production site known as Megafab.
Intel hasn’t yet commented directly on the investment details, but a press release was quick to praise Israeli expertise: “Israel is a global center of technical talent and innovation and one of Intel’s significant global manufacturing and R&D centers. Since its establishment in 1974, Intel Israel has played a crucial role in Intel’s global success. Our intention to expand manufacturing capacity in Israel is driven by our commitment to meeting future manufacturing needs and supporting Intel’s IDM 2.0 strategy, and we appreciate the continued support of the Israeli government”.
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Formal approval of the new agreement is expected to happen in a few weeks as Intel ramps up its international efforts to expand worldwide production capacity. According to a press release from the Israeli finance ministry, thousands of additional technicians will be required in Kiryat Gat, with Intel offering higher wages than the industry average. Additionally, the processor company has agreed to increase its tax obligations from 5% to 7.5%. Intel aims to close the investment deal and commence plant operations by 2027, operating the complex until at least 2035.
As manufacturers like Apple opt to develop their own processor architectures, Intel increasingly needs to adapt to a changing global market worth trillions of dollars. The company’s recent investment in Israel comes shortly after announcing a $4.6 billion deal to build a chip assembly and testing facility in Warsaw, Poland, and joins existing manufacturing facilities in Ireland and Germany.