Intel denies it is suspending the expansion of its Israel chip plant

Intel denies it is suspending the expansion of its Israel chip plant

Intel is debunking rumors of a possible halt to the expansion of its own Israel chip plant. The company has informed the nation’s Finance Ministry that it is simply swapping out contractors.

After Israeli outlet Calcalist published an article about the alleged halt on June 10, the news was picked up by multiple international publications. However, it’s now evident that the expansion plans in Israel will at worst be delayed, not canceled. That was also the conclusion of Tom’s Hardware, which received a slightly more extensive response from Intel than Calcalist.

According to a Tom’s Hardware source, there’s no sign of any meaningful delay in the Israeli plans. The $25 billion investment is still going ahead.


The fact there’s some uncertainty about Intel’s chip plans in Israel is not surprising. First, the location, Kiryat Gat, is only around 30 kilometers away from the active warzone of Gaza. Second, Intel has moved a series of high-ranking employees from Intel Israel to Intel Ohio. That change was presented as a necessary step to respond to the U.S. CHIPS Act. Washington has set aside tens of billions of dollars, which are ready to support the country’s chip industry, in which Intel plays a key role.

In addition, Intel has had to review its Israeli plans over the past year anyway. It was forced to abandon a $5.4 billion takeover of Israel-based Tower Semiconductor. However, the U.S. chip giant will start making semiconductors from Tower.

As it happens, it should be noted that we are talking about Intel Foundry, now a separate business unit within the larger Intel. As a chip designer, it is as much an effective customer of Taiwan’s TSMC as it is when it employs Intel Foundry. For example, Lunar Lake, the architecture for a new generation of laptops with “AI PC” specifications, is made at TSMC. The latest Xeons, however, are ‘in-house’, if that term is still fair to use when we’re really talking about an Intel-Intel Foundry partnership.

Intel Foundry will thus have to stand on its own two feet, with customers including Microsoft, Nvidia and even AI PC competitor Qualcomm possibly on the horizon.

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