Intel Reportedly Halts Construction of $25 Billion Chip Plant in Israel

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Intel Corp. has reportedly halted its plans to build a $25-billion factory in Israel, according to a report by the Israeli financial news website Calcalist. Intel did not confirm or deny the report but emphasized the necessity to adjust major projects according to changing timelines and business conditions.

In a statement, Intel highlighted its continued commitment to Israel as a key global manufacturing and R&D hub, stating:

“Israel continues to be one of our key global manufacturing and R&D sites and we remain fully committed to the region. 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.”

In December, the Israeli government agreed to provide Intel with a $3.2-billion grant to support the construction of the proposed chip plant in southern Israel. This factory, intended to be located at Intel’s existing Kiryat Gat site, was part of Intel’s strategy to bolster a resilient global supply chain, alongside significant investments in Europe and the United States.

Intel’s current operations in Israel include four development and production sites, with the Kiryat Gat facility, known as Fab 28, producing 10-nanometer chips using Intel 7 technology. The new plant, Fab 38, was planned to open in 2028 and operate until 2035.

The decision to pause the project comes at a time when Intel employs nearly 12,000 people in Israel, underscoring the company’s substantial presence and investment in the region.