Intel Announces $15 Billion Expansion Plan in Kiryat Gat and will construct a new chip factory

Intel has revealed a comprehensive investment plan in collaboration with the Israeli government to bolster its production capabilities in Kiryat Gat. This development involves an additional $15 billion investment in the plant, supplementing the $10 billion commitment made in 2019. The multinational corporation will construct a new chip factory, supported by a substantial $3.2 billion grant disbursed over several years, constituting 12.8% of the total investment.

As part of the agreement, Intel pledges to make purchases from Israeli suppliers amounting to NIS 60 billion over the next decade. This strategic initiative is integral to Intel's broader efforts to enhance its global supply chain, aligning with concurrent investments in chip manufacturing in Europe and the United States. Construction activities for the expansion are already underway, with completed foundations and initial floors in some buildings, attesting to the project's swift progress.

With a valuation of approximately $150 billion, Intel is a major player in microprocessor and integrated circuit design and manufacturing. The company, boasting a global workforce of around 130,000, including 12,000 in Israel, has been a fixture in the country since the 1970s, operating in development centers in Haifa, Jerusalem, and Petach Tikva, along with a production plant in Kiryat Gat.

Daniel Ben Atar, Corporate Vice President at Intel Global and Co-CEO of Intel's Global Manufacturing Organization and Intel Israel, expressed pride in the expansion, emphasizing its significance in maintaining Israel's prominence in semiconductor technology. Atar lauded the support of the Israeli government as instrumental in ensuring Intel's continued contribution to the nation's semiconductor prowess.

"The State of Israel will be a superpower in the production of chips. In the difficult times we are in, this is a chip of hope and a dream that is coming true," added Ben Atar in an interview with Ynet. The $3.2 billion grant, approved by the Israel Investment Center, marks the largest government grant ever provided to a plant in Israel and will be disbursed over five years.

Highlighting the transformative impact of the new plant, Atar clarified that although referred to as an 'expansion' due to its adjacency to the existing factory, it is essentially a new facility. The endeavor is expected to create 4,000 new jobs in the region, fostering exposure to cutting-edge technologies for employees.

Notably, Intel's decision to halt the construction of a new campus in Haifa last year, coupled with organizational cutbacks, raised questions. The company cited tests indicating the sufficiency of existing offices for Haifa employees as the reason for the strategic shift. Intel Israel, currently employing approximately 12,000 people, remains the largest private employer in the country.

In the words of Intel's global CEO, "The Israelis are the wealthiest people in the world, they have not lost. No target date because of the war." The expansion in Kiryat Gat represents a significant stride in positioning Israel as a key player in the global chip production landscape.