Intel Pauses Building of $25 Billion Factory in Israel

Intel suspended plans to build a $25 billion chipmaking facility in Israel. The company said it made the decision due to changing project timelines and market dynamics.

According to local media Calcalistech, Intel’s suppliers in Israel have received notice of cancellation of contracts for the provision of equipment needed to build the new factory, a plan agreed by the chipmaker and the Israeli government in December 2023. Under the deal, the government was to provide Intel with a $3.2 billion grant for the establishment of the facility, however, the publication noted the company’s Israeli operation has recently moved to relocate some of its senior executives to a new site it is building in Ohio, US. Intel and the Israeli government previously earmarked 2028 for the factory’s launch.

Israeli officials are aware of the company’s decision, and in a statement seen by Calcalistech, Intel explained managing a project of this magnitude, especially in the high-tech industry, usually involves schedule adjustments, adding that the decisions are based on business conditions, market dynamics, and responsible capital management. Intel apparently added it remains committed to the market, which it brands as one of its key manufacturing and R&D sites. In 2023, Intel made a $300 million investment into Israel-based Tower Semiconductor, after a proposed merger between the pair fell through.