Report: Intel stops work on new plant in Kiryat Gat

Intel Corp. (Nasdaq: INTC) has informed a major infrastructure company in Israel to halt work on expanding its factory in Kiryat Gat. According to a report by Channel 12 News, Intel has been sending letters in recent days requesting that the work be postponed. The name of the company was not disclosed.

Last December, Intel confirmed that the company, Israel’s largest technology employer, would invest an additional $15 billion in a new chip plant in Kiryat Gat, in addition to the $10 billion it already invested in 2019.

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Under the agreement between the Israeli government and the chipmaker, Intel will receive a $3.2 billion grant over the years, contingent on the achievement of various milestones, most likely employment targets and reinvestment in Israeli companies and contractors. Intel has committed to purchasing NIS 60 billion worth of products and services from Israeli companies over the next decade. This is the largest grant the Israeli government has ever given to a private company, and it is estimated at about 12% of the total expenditure on building and upgrading the new plant.

Intel said: “Israel remains one of our most important global manufacturing and R&D sites and we remain committed to the region. As previously mentioned, the scope and pace of Intel’s manufacturing expansion at the company’s sites around the world will depend on a number of changing factors. Managing a project of this magnitude, particularly in our industry, typically requires schedule adjustments. Our decisions are based on business conditions, market dynamics and capital management responsibilities.”

Published by Globes, Israel Business News – en.globes.co.il – on June 10, 2024.

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