Intel to Invest $25 Billion in New Fab in Israel

Following Intel's recent announcements of a €20 billion two-fab deal in Germany and a €4.6 billion assembly and test plant in Poland, the company has now unveiled a $25 billion investment for a new fab in Israel.

Israeli Prime Minister Benjamin Netanyahu shared the news on TV, stating that it marks the largest international investment in the country to date. Intel did not explicitly endorse Netanyahu's statement but acknowledged Israel's standing as a global hub for technical talent and innovation, and one of its significant manufacturing and R&D centres.

The fab will be located in Kiryat Gat, where Intel already has a fab, and is set to begin operations in 2027. The Israeli government will contribute $3.2 billion to the $25 billion project cost, which may include a previously announced $10 billion investment. The finance ministry of Israel noted that profits from the fab will be taxed at 7.5%, up from the current 5%. Intel cited its commitment to meeting future manufacturing needs and supporting its IDM 2.0 strategy as driving factors behind the decision to expand its manufacturing capacity in Israel.

The new fab in Israel is expected to create thousands of jobs and boost the country's economy significantly. It will use Intel's most advanced manufacturing processes to produce chips for a wide range of applications, including artificial intelligence, autonomous vehicles, and data centres. The investment comes as part of Intel's larger strategy to increase its global manufacturing footprint and reduce reliance on third-party fabs.

Intel has been operating in Israel since 1974 and has invested heavily in the country over the years. According to a report by Start-Up Nation Central, Intel has acquired 78 Israeli companies and invested in 81 others. The company employs over 13,000 people in Israel, making it one of the largest employers in the country's high-tech sector.

The Israeli government has been actively promoting the country as a hub for tech innovation and attracting foreign investment. The $3.2 billion investment by the government in Intel's new fab is one of the largest such investments in recent years. Commenting on the investment, Israeli Finance Minister Avigdor Lieberman said, "This is a vote of confidence in the Israeli economy and the Israeli workforce."