The Israeli Government has approved a generous $3.2 billion grant for Intel’s ambitious $25 billion chip production site in the country.

Amid ongoing tensions in the Israel-Hamas conflict, the Israeli government has approved a significant grant of $3.2 billion for Intel's new $25 billion chip manufacturing facility in the southern region of the country. Intel The new state-of-the-art manufacturing site is projected to be operational in 2027 and will run until at least 2035 according to reports from Reuters.

Intel regards the expansion plan for its facility in Kiryat Gat—situated in southern Israel—as a pivotal part of its strategy to bolster the resilience of global supply chains.

This initiative aligns with Intel's ongoing and future investments in manufacturing operations across Europe and beyond.

Intel expressed its commitment to the project in a statement, noting that the $3.2 billion grant represents 12.8% of the overall investment. Moreover, the company plans to source goods and services worth an impressive $16.6 billion from local Israeli suppliers in the next decade, which is expected to create several thousand new jobs. United States .

Currently, Intel operates four sites focused on development and production in Israel, including a major facility in Kiryat Gat, which employs nearly 12,000 individuals. While Prime Minister Benjamin Netanyahu had initially revealed plans in June for Intel's new chip plant, the company had held back on confirming this investment until now.

Despite earlier silence, Intel announced that work has commenced on expanding the site, which entails the construction of clean rooms and support buildings.

The Resilience of Israel’s Tech Sector Amidst Conflict

Last month, Sony Semiconductor Israel provided insights into how, despite ongoing conflicts, the dedication of their workforce—both in Israel and internationally—ensures business operations proceed uninterrupted.

Dima Feldman, VP of Product Management and Marketing at Sony Semiconductor Israel, shared with Metaverse Post that their local management plays a crucial role in daily operations, particularly when team members are unavailable, and they benefit significantly from support from their international teams. This reflects the company’s ethos and the resilience of their collective spirit. talked to Metaverse Post Feldman discussed logistical strategies, stressing that essential tasks such as chip manufacturing and assembly occur outside of Israel, ensuring ongoing operations despite local challenges. He also pointed to Sony's efficient management of resources, effectively allocating assets both domestically and internationally to meet customer demands.

The tech industry, which accounts for over half of Israel’s exports and nearly 20% of its GDP, is currently navigating a landscape filled with uncertainty.

Even before the onset of conflict, the technology sector faced financial constraints due to a global slowdown and a divisive judicial reform. This war has only intensified the economic challenges, with growth forecasts dropping from an expected 3.4% to just around 2%, with little hope for improvement in the near future.

The tech sector In 2023, Israeli startups have reportedly secured over $6 billion in investments despite tough circumstances. This figure, while lower than the $16 billion raised the previous year, highlights the industry's resilience in the face of geopolitical challenges. Observing the recovery and growth of the tech sector post-conflict will certainly be intriguing.

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Kumar is an experienced tech journalist specializing in the rapidly evolving areas at the crossroads of AI/ML, marketing tech, and emerging technologies such as cryptocurrency, blockchain, and NFTs. With over three years in the field, Kumar has a strong record of crafting engaging narratives, conducting revealing interviews, and providing in-depth analyses. Possessing a unique blend of technical insight and storytelling prowess, Kumar excels in breaking down complex tech concepts for diverse audiences in an engaging manner.