Intel Corp. (Nasdaq: INTC) has informed a large infrastructure company in Israel to halt work on expansion of the fab in Kiryat Gat. In the past few days, Intel has sent letters asking for the work to be postponed, according to a report on Channel 12 News. The name of the company has not been disclosed.
Last December, Intel confirmed that as the biggest tech employer in Israel it would invest $15 billion more in a new chip plant in Kiryat Gat in addition to the $10 billion it began investing in 2019.
As part of the agreement between the Israeli government and the chipmaker, Intel will receive a $3.2 billion grant over the years in accordance with meeting various milestones, most likely employment targets and reinvestment in Israeli companies and contractors. Intel has committed to purchase products and services from Israeli companies worth NIS 60 billion over the next decade. This is the highest grant the Israeli government has ever given to a private company and it is estimated at about 12% of the total spending for building and upgrading the new plant.
Intel said, "Israel continues to be one of our key global manufacturing and R&D sites, and we continue to be committed to the region. As noted previously, the scope and pace of Intel's manufacturing expansion at the company's sites around the world depends on a number of changing factors. Managing a project of this magnitude, especially in our industry, usually involves schedule adjustments. Our decisions are based on business conditions, market dynamics and capital management responsibility."
Published by Globes, Israel business news - en.globes.co.il - on June 10, 2024.
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