Amid the tense backdrop of escalating conflict between Israel and Hamas, tech giant Intel has struck a historic deal with the Israeli government.
Reuters reports that Intel is set to receive an unprecedented $3.2 billion grant to help fund the establishment of a groundbreaking $25 billion chip manufacturing facility in southern Israel, the largest investment ever made by a company in the country.
Expanding Chipmaking Capabilities in Israel
The announcement comes at a critical juncture, highlighting a significant show of support from a major American corporation during a time of rising tensions.
Despite the ongoing conflict, Intel remains committed to expanding its chipmaking capabilities at Kiryat Gat, which is only 16 miles northeast of Gaza.
Following the announcement, Intel shares jumped 2.73% to $49.28 on the Nasdaq, reflecting investor confidence in the tech giant's bold move.
With nearly 10% of its global workforce based in Israel, Intel's decision to strengthen its presence in the region emphasizes the region's strategic importance in the company's operations.
The expansion plan at Kiryat Gat is a pivotal component of Intel's overarching strategy to fortify its global supply chain.
It dovetails with the company's ongoing and planned investments in manufacturing facilities across Europe and the United States, positioning Intel as a key player in the semiconductor industry.
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A Closer Look at the Deal
Pat Gelsinger, Intel's CEO, has been instrumental in driving the company's aggressive investment initiatives. Under his leadership, Intel has poured billions into constructing factories across three continents, aiming to reclaim its dominance in chipmaking and effectively compete with industry rivals like AMD, Nvidia, and Samsung.
Daniel Benatar, Vice President at Intel, stressed the significance of the Israeli government's support, emphasizing its role in ensuring Israel's continued status as a global hub for semiconductor technology and talent.
Intel's longstanding relationship with Israel is noteworthy, with the company employing 11,700 individuals and investing over $50 billion in the country over the past half-century.
This substantial investment represents Intel's unwavering commitment to bolstering its manufacturing capabilities to meet future demands.
Government Support
The Israeli government's substantial grant, spread over several years, mirrors the magnitude of this collaboration.
Furthermore, Intel has pledged to procure $16.6 billion worth of goods and services from Israeli suppliers over the next decade, affirming its dedication to fostering economic growth in the region.
Construction is already underway for the expansion at Kiryat Gat, with a significant portion of the infrastructure nearing completion. CNN tells us that the new plant is slated to commence operations in 2028 and will run through 2035, poised to be a cornerstone of Intel's global manufacturing network.
Amid global geopolitical tensions, Intel's strategic investments in the US, Europe, and now Israel signify a concerted effort to fortify supply chains and maintain a resilient global presence.
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