According to Agence France-Presse's report,$Intel (INTC.US)$The plan to expand the factory in Israel has already been suspended.
In 2021, Intel announced the investment of 10 billion US dollars to establish a chip factory in the southern Israeli town of Kiryat Gat. In December last year, Intel announced an additional investment of 15 billion US dollars for factory expansion, with a total investment of 25 billion US dollars. The Israeli government promised to provide Intel with a subsidy of 3.2 billion US dollars.
Intel has responded to the report about suspending the expansion of its Israeli factory, but the company did not directly admit or deny, nor did it mention whether its Israeli business was affected by the Israeli-Palestinian conflict.
"Israel remains one of our global major manufacturing and R&D bases, and we will continue to invest heavily in the region. Managing large-scale projects, especially in our industry, often requires adapting to changing timelines. Our decisions are based on business conditions, market dynamics, and responsible capital management." said Intel in a statement.
Intel is one of the largest employers in the Israeli high-tech industry, with nearly 12,000 employees. The company operates four R&D and production bases in Israel, including the Fab 28 factory in Kiryat Gat, which will produce Intel's 10-nanometer chips. According to the original plan, the Fab 28 factory will start production in 2028.
It is worth mentioning that media reports previously stated that Intel's chip factory construction plan in Germany was delayed due to EU subsidy approval and land issues, and the new construction start time was postponed to May 2025. However, if Intel can speed up the progress of construction and equipment installation, the factory may still be put into operation as originally planned by the end of 2027 to early 2028.
Intel is one of the few companies that has both chip design and manufacturing businesses, but its chip foundry business has performed poorly in recent years and is unlikely to improve in the short term.
The financial report shows that the revenue of Intel's foundry department last year was 18.9 billion US dollars, and the loss was nearly 7 billion US dollars. Intel CEO Pat Gelsinger warned earlier that 2024 will be the trough of Intel's foundry business, and it is expected that this part of the business will not achieve a balance of payments within the next three years.
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