Intel Halts $25 Billion Expansion Plans in Israel

The Israeli Calcalist website reported, on Monday, that chip manufacturer Intel (INTEL) has decided to halt a $25 billion expansion of its factory in Israel.

The website indicated that in recent days, Intel's suppliers received notice of cancellation of contracts signed with them, which provided for the supply of equipment and materials necessary for the expansion of its new factory in Kiryat Gat, in southern Israel.

Calcalist added that a number of senior officials at Intel Israel have moved to work in a factory that Intel is establishing in the US state of Ohio, as part of the American program to encourage the establishment of chip factories in the country.

Last December, the Israeli government agreed to give Intel $3.2 billion to build a $25 billion chip factory in southern Israel.

In response to a question from Reuters about this report, the company pointed to the need to adjust the dates of large projects according to changing schedules without direct reference to the project, or confirming or denying the Calcalist report.

Intel said: “Israel remains one of our key manufacturing and R&D locations in the world, and we remain fully committed to the region.”

“Project management is large, especially in our field, and often involves adjustments according to changing schedules. Our decisions depend on business conditions, market movement and responsible capital management,” it added.

Intel operates four development and production sites in Israel, including its Fab28 manufacturing plant in Kiryat Gat. The factory produces Intel 7 technology, or chips measuring ten nanometers. The Fab 38 factory was scheduled to open in 2028 and operate until 2035.

Intel employs approximately 12,000 people in Israel.