Intel has confirmed its intention to invest $25 billion in Israel.
The mentioned statement was made by the specified manufacturer of electronic devices and computer components after receiving incentives from the Israeli government for $3.2 billion.
The expenses incurred by the state will be directed to the implementation of activities to expand Intel’s wafer-making plant in Kiryat Gat, south of Tel Aviv. These costs amount to 12.8% of the company’s planned investments.
Intel’s statement, which was published on Tuesday, December 26, notes that the implementation of the plan to expand the plant located in Kiryat Gat is an important part of the brand’s efforts to create a more sustainable global supply chain. The company also separately drew attention to the fact that it currently provides financing for production projects in Europe and the United States.
Intel is one of the chip makers that are diversifying their manufacturing activities outside of Asia. This region dominates making microcircuits in terms of the geographical distribution of the respective production facilities.
Intel’s history is an example of a difficult path from the top to the loss of leadership positions, which is a negative movement both in terms of financial performance and in the point of view of the moral perception of reducing its size. The company has the status of a pioneer in the semiconductor industry, but it failed to ride a new wave, caused by the hype around artificial intelligence, in this industry. Nowadays Intel is striving to restore its former greatness in the space of advanced technologies. Along the way, the company will have to improve its competitiveness, which at the current level is inferior to the capabilities of Nvidia Corp. and Taiwan Semiconductor Manufacturing Co.
The Israeli government has asked Intel to start work at the plant by 2028 and not stop this process until at least 2035. The company also committed to spending $16.6 billion on Israeli suppliers.
The implementation of the cooperation program between the government of the mentioned country and Intel will create thousands of direct and indirect jobs. Currently, the number of employees of the manufacturer in Israel is 11,700 people. This figure will increase.
The Israeli Finance Ministry said that the timing, which comes amid a high level of competition in the world for investments in chip production, is a significant vote of confidence in the economy of this country.
Under the leadership of Pat Gelsinger, Intel has directed financing for the building of factories on three continents. The company intends to invest $33 billion in the development of two chip manufacturing plants in Magdeburg. The government of this European country has promised to provide large subsidies to gain foreign financing.
Last year, Intel announced plans to invest up to $100 billion in the building of potentially the world’s largest chip manufacturing complex in Ohio. The company’s competitors, including Samsung and TSMC, have similar plans related to projects in the United States, the implementation of which is delayed.