Intel to get $3.2B gov't grant for new $25B Israel chip plant

Israel's government agreed to give Intel Corp a $3.2 billion grant for a new $25 billion chip plant it plans to build in southern Israel, both sides said on December 26, Report informs referring to Reuters.

The news comes as Israel remains locked in a war with Palestinian militant group Hamas in the wake of the October 7 Hamas attack on Israel.

The expansion plan for its Kiryat Gat site is an "important part of Intel’s efforts to foster a more resilient global supply chain, alongside the company’s ongoing and planned manufacturing investments in Europe and the United States," Intel said in a statement.

In addition to the grant that amounts to 12.8% of the total investment, the chipmaker also committed to buy 60 billion shekels ($16.6 billion) worth of goods and services from Israeli suppliers over the next decade, while the new facility is expected to create several thousand jobs.

Intel operates four development and production sites in Israel, including a manufacturing plant in Kiryat Gat, and employs nearly 12,000 people in the country.

The new plant is due to open in 2027 and operate through 2035.