Published in News

Intel stalls Israel plant expansion construction

by on11 June 2024

Unclear why

Chipzilla appears to have stalled construction on its semiconductor manufacturing plant in Kiryat Gat, Israel, which is valued at 25 billion dollars (23.25 billion euro).

Israeli media sources reported that Intel has now told a construction firm to down tools on this project.

The decision to suspend work on the Israeli fabrication plant, which was already underway, comes about a year and a half after Intel scrapped its plans to erect a luxury research and development complex in Haifa, Israel.

In a statement, Intel said it was not abandoning Israel, where it employs close to 12,000 individuals and said that you get delays on the big jobs.

"Israel remains a pivotal global site for our manufacturing, research and development activities, and our commitment to this region is unwavering. As previously mentioned, the extent and rate of Intel's manufacturing growth globally are largely influenced by various elements," the tech giant stated.

"Overseeing projects of significant magnitude, particularly in our sector, often requires adjusting to evolving schedules. Our decisions are influenced by business conditions, market trends, and prudent management of capital."

It is unclear how long the work will be delayed. Chipzilla’s remarks about capital management imply that the company may be paused while determining project funding strategies. Intel has historically used private equity from Brookfield Asset Management and Apollo Global Management to finance some of its fabrication projects.

Intel has secured 11 billion dollars (10.23 billion euros) from Apollo for a joint venture at its Irish chip fabrication plant.

This postponement announcement comes less than six months after Intel disclosed its intention to enhance fabrication operations in Israel. The 25 billion dollar project (23.25 billion euros) was expected to receive 3.2 billion dollars (2.98 billion euros) in government subsidies and aimed to "nurture a more robust global supply chain."

This facility is among several fabrication projects announced by Intel following Pat Gelsinger's return to the company as CEO in early 2021. Intel has pledged to invest over 100 billion dollars (93 billion euros to become the second-largest foundry by 2030, trailing only TSMC.

Intel's expansion plans include enlarging facilities in Arizona, New Mexico, Oregon, and Ireland, as well as constructing new sites in Ohio and Germany.

Last modified on 11 June 2024
Rate this item
(0 votes)