Intel Halting Construction Of Israel Plant, Says Report

Matthew Broersma,
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Workers in a semiconductor plant. Image credit: Intel

Intel reportedly halting construction of $25bn semiconductor plant in southern Israel as executives transfer to Ohio

Intel is halting construction of a $25 billion (£19.6bn) semiconductor plant in Israel, according to a report by Israel financial news website Calcalistech on Monday.

The company neither confirmed nor denied the report, but affirmed Israel as a key manufacturing and research and development site and the necessity in large projects of making “schedule adjustments”.

“Our decisions are based on business conditions, market dynamics, and responsible capital management,” the chip firm said in a statement.

Intel’s suppliers received notice in recent days that it would cancel contracts for the supply of equipment and materials for the plant, known as Fab 38, according to the report.

Automated handlers make selections for test validation. Image credit: Intel

Executive transfers

It said Israel’s Ministry of Finance was aware of the decision to halt construction.

The site said senior Intel Israel officials had transferred to a plant Intel is building in Ohio under a US plan to encourage domestic chip manufacturing.

In 2022 Intel chose a site outside Dayton, Ohio, for what it said could become the world’s biggest chip manufacturing complex with investment of up to $100bn over a decade.

Last December Intel formed an agreement with the Israeli government to construct the new fabrication facility in Kiryat Gat, in southern Israel, with an investment of $25bn and government incentives worth $3.2bn.

‘Remain committed’

As part of the deal Intel agreed to purchase goods and services worth 60bn shekels (£12.6bn) from Israeli suppliers over the next 10 years.

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

“As mentioned previously, the scope and rate of expansion of Intel’s production at the company’s sites around the world depend on a number of changing factors. Managing a project of this magnitude, especially in our industry, usually involves schedule adjustments.”