Intel to halt $25 billion Israel chip facility

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Intel pauses project funding despite major funding

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(Image credit: Shutterstock / Alexander Tolstykh)

Intel has reportedly halted construction on a $25 billion chip manufacturing factory in the Israeli city of Kiryat Gat.

The plant was being constructed as part of Intel’s investment to diversify and increase the resilience of its global supply chain, having previously relied heavily on semiconductor manufacturers in Taiwan for its supply of high-end chips.

In a statement (via The Register), the company stated that “Israel continues to be one of our key global manufacturing and R&D sites and we remain fully committed to the region. As we've previously noted, the scope and pace of Intel's manufacturing expansion at our sites around the world depends heavily on various factors.”

Plant construction put on hold

“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,” the company stated. 

Intel confirmed its commitments to Israel, where the chip giant employs almost 12,000 workers.

The latest build to be canceled was subject to receive $3.2 billion in Israeli government subsidies, with The Register suggesting that, by citing capital management as a cause for pause, Intel could be trying to figure out how to pay for the project in the meantime.

How long the project will be kept on pause for is unconfirmed, but it is not the first time Intel has had to put a project on pause in order to figure out its funding. In 2022, the company also canceled plans for a $200 million research and development center in Haifa, Israel.

Intel is planning to establish itself as the second largest global chip maker by 2030, with the company itself and the US government providing substantial capital via the CHIPS Act to diversify semiconductor manufacturing outside of Taiwan, especially as China steps up its rhetoric of reunification.

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Benedict Collins
Benedict Collins
Staff Writer (Security)

Benedict has been writing about security issues for close to 5 years, at first covering geopolitics and international relations while at the University of Buckingham. During this time he studied BA Politics with Journalism, for which he received a second-class honours (upper division). Benedict then continued his studies at a postgraduate level and achieved a distinction in MA Security, Intelligence and Diplomacy. Benedict transitioned his security interests towards cybersecurity upon joining TechRadar Pro as a Staff Writer, focussing on state-sponsored threat actors, malware, social engineering, and national security. Benedict is also an expert on B2B security products, including firewalls, antivirus, endpoint security, and password management.