Intel halts plans for $25bn factory in Israel

US chipmaker Intel Corp INTC.O is reportedly halting plans for a $25 billion factory in Israel, according to Channel 12 News.

Intel sent letters in recent days requesting that the work on the plant be postponed. When asked about the report, the US company emphasised the need to adjust large projects to changing timelines without directly addressing the specific project.

Intel said in a statement, “Israel continues to be one of our key global manufacturing and R&D sites, and we remain fully committed to the region.”

“Managing large-scale projects, especially in our industry, often involves adapting to changing timelines. Our decisions are based on business conditions, market dynamics and responsible capital management,” it added.

It comes after Israel’s government in December agreed to provide Intel with a $3.2 billion grant to construct a $25 billion chip plant in southern Israel, calling it the largest-ever international investment in the country.

Intel has previously stated that the proposed factory at its Kiryat Gat site, where it already has a chip plant, is an “important part of Intel’s efforts to foster a more resilient global supply chain” alongside the company’s investments in Europe and the United States.

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The company operates four development and production sites in Israel, including its manufacturing plant in Kiryat Gat, known as Fab 28.

The planned Fab 38 plant was scheduled to open in 2028 and operate until 2035.

During its almost five decades of operations in Israel, Intel has grown to become the country’s largest private employer and exporter and a leader of the local electronics and information industry, according to the company’s website.

Following the announcement of its new plant in December, two months after Israel launched its brutal bombing campaign in Gaza, activists called for the boycott of computers with Intel chips, and it urged investors to divest from Intel stock and major institutions to exclude Intel from tenders.

“Ethical responsibility and international law aside, by insisting on investing tens of billions of dollars in Israel, a ‘war zone,’ only miles away from occupied Gaza, Intel is putting its leaders’ fanatic ideological commitment to Israel over financial and fiduciary responsibility,” said the BDS spokesperson. “Why else would Intel freeze plans to expand its chipmaking manufacturing in Ohio while throwing those billions into Israel, a state committing genocide?”