According to media reports, Intel has suspended plans to expand its factories in Israel.
In 2021, Intel announced an investment of $10 billion to establish a chip factory in the town of Gat in southern Israel. Last December, Intel announced an additional $15 billion investment to expand its factories, with a total investment of $25 billion. The Israeli government has promised to provide $3.2 billion in subsidies to Intel.
Intel responded to reports of suspending the expansion of its Israeli factory, but the company did not directly acknowledge or deny it, nor did it mention whether its Israeli business was affected by the Israeli Palestinian conflict.
Intel stated in a statement, "Israel remains one of our major manufacturing and research and development bases globally, and we will continue to fully invest in the region. Managing large projects, especially in our industry, often requires adapting to constantly changing timelines. Our decisions are based on business conditions, market dynamics, and responsible capital management."
Intel is one of the largest employers in Israel's high-tech industry, with nearly 12000 employees locally. The company operates four research and production bases in Israel, including the Fab 28 factory located in the town of Gath, which will produce Intel 10 nanometer chips. According to the original plan, Fab 28 factory will be put into operation in 2028.
It is worth mentioning that there have been media reports that Intel's chip factory construction plan in Germany has been delayed due to EU subsidy approval and land issues, and the new start date has been postponed to May 2025. However, if Intel can accelerate the progress of construction and equipment installation, the factory is still expected to start production from the originally scheduled end of 2027 to early 2028.
Intel is one of the few companies that combines chip design and manufacturing, but its chip foundry business has performed poorly in recent years and is difficult to improve in the short term.
The financial report shows that Intel's contract manufacturing division had a revenue of $18.9 billion and a loss of nearly $7 billion last year. Intel CEO Pat Gelsinger has previously warned that 2024 will be a low point for Intel's foundry business, and it is expected that this part of the business will not achieve breakeven in the next three years.