The Israeli government has provided Intel Corp with a $3.2 billion grant as part of the chip company's $25 billion investment in a production facility about 40 miles south of Tel Aviv, the companies said on Tuesday.Intel's increased investment in Israel confirms Prime Minister Benjamin Netanyahu's initial announcement in June and comes at a time of turmoil for the Israeli economy amid its ongoing war with Hamas.
Meanwhile, Israel has faced growing criticism of its actions in Gaza, where civilian deaths and the Israeli military's own casualties have continued to rise.
According to recent comments by Intel CEO Pat Gelsinger, about 17% of the company's 20,000 employees and contractors in Israel are currently on reserve duty. "We have lost several family members in the conflict, some of our members have lost their children and some have become hostages," he added.
According to Reuters, the grant will account for 12.8% of the total investment in the Kiryat Gat facility and will be unfrozen and used over several years depending on the progress of construction.
Intel has also committed to purchasing 60 billion shekels (approximately $16.6 billion) in goods and services from Israeli suppliers over the next decade. The new factory is expected to create thousands of jobs and begin operations in 2028.
This is another move after Intel announced in 2019 that it would invest US$15 billion to build a new factory.
According to Bloomberg, Intel said in a statement: "The expansion of the Kiryat Gat plant is an important part of Intel's efforts to create a more resilient global supply chain, and is also part of the company's ongoing and planned manufacturing investments in Europe and the United States."