Intel Pauses $25B Expansion of Israeli Chip Plant

Recent reports indicate that Intel is halting the expansion of a significant factory project in Israel, which was originally set to receive an additional $15 billion investment.

In December of the previous year, Intel revealed plans to expand its ongoing $10 billion construction project at the Kiryat Gat facility in southern Israel. This expansion, totaling $25 billion, was set to receive a $3.2 billion grant from the Israeli government. The plant was expected to become operational in 2028 and continue operations through at least 2035.

The specific reasons for the pause in the next phase of the project have not been disclosed.

Intel issued a statement noting that large-scale projects such as this often encounter numerous dependencies, which can lead to delays. The company reaffirmed its commitment to Israel, stating, "Israel remains one of our key global manufacturing and R&D hubs, and we are committed to the region's development."

The statement further explained, "Managing large-scale projects, particularly in our industry, typically requires adapting to evolving timelines. Decisions are based on business conditions, market dynamics, and responsible capital management."

According to Intel’s annual report, Israel is the third largest country/region for Intel’s operations by asset size, following the United States and Ireland.

Intel has had a presence in Israel for 50 years, employing nearly 12,000 people, and has established a research center in Haifa.

The duration of the project delay is currently unknown. Intel’s comments on capital management indicate that the postponement may be related to financing strategies. Intel has been utilizing private equity from firms such as Brookfield Asset Management and Apollo Global Management to fund some of its wafer fabrication projects.