Intel has reportedly halted construction of a $25 billion chip factory in the Israeli city of Kiryat Gat.
The factory was built as part of Intel’s investments to diversify its global supply chain and increase resilience, after previously relying heavily on semiconductor makers in Taiwan for the supply of high-quality chips.
In a statement (via The register), the company stated that “Israel continues to be one of our most important global manufacturing and R&D locations and we remain fully committed to the region. As we have previously noted, the scale and pace of Intel’s manufacturing expansion at our sites around the world depends heavily on several factors.”
Construction of the factory was suspended
“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,” the company said.
Intel confirmed its commitments to Israel, where the chip giant employs nearly 12,000 workers.
The latest construction project to be canceled reportedly received $3.2 billion in Israeli government subsidies The register This suggests that by citing capital management as a reason for pause, Intel could be trying to figure out how to pay for the project in the meantime.
It hasn’t been confirmed how long the project will be on hold for, but it’s not the first time Intel has had to put a project on hold to figure out its funding. In 2022, the company also canceled plans for a $200 million research and development center in Haifa, Israel.
Intel plans to establish itself as the world’s second-largest chipmaker by 2030, with the company itself and the US government providing substantial capital through the CHIPS Act to diversify semiconductor production outside of Taiwan, especially as China steps up its rhetoric of reunification.
