Why Intel cancelled $25 bn chip factory expansion in Israel?
In a major economic setback for Israel, Intel has halted its planned expansion of a major factory project worth $25 billion in the occupied Palestinian territory under the Zionist control
Jerusalem: In a major economic setback for Israel, Intel has halted its planned expansion of a major factory project worth $25 billion in the occupied Palestinian territory under the Zionist control.
According to the Israeli financial news website Calcalist, the Finance Ministry is aware of Intel's decision to halt the proposed expansion of the plant in Israel.
The publication added that Intel's suppliers received in the past days notices of the cancellation of contracts for the supply of equipment and materials required for the establishment of the factory.
Intel has earlier said that the factory proposed for its Kiryat Gat site, where it has an existing chip plant, was an "important part of Intel’s efforts to foster a more resilient global supply chain" alongside the company’s investments in Europe and the United States.
Israel's government in December agreed to give Intel a $3.2-billion grant to build the $25-billion chip plant in southern Israel, according to Reuters.
No link to Gaza war: Intel
Intel operates four development and production sites and employs nearly 12,000 people in Israel, including its manufacturing plant in Kiryat Gat called Fab 28. The factory produces Intel 7 technology, or 10-nanometer chips.
The planned Fab 38 plant was due to open in 2028 and operate through 2035.
Queried by news agency AFP, Intel gave no reason for the suspension of the next phase and made no link to the ongoing war between Israel and Hamas in Gaza.
“Israel continues to be one of our key global manufacturing and R&D sites and we remain fully committed to the region,” the company said in a statement.
It added that “managing large-scale projects, especially in our industry, often involves adapting to changing timelines.”
Gaza war impact on Israeli Economy
Experts however said that the Israeli economy is in the doldrums, going from bad to worse because of the country’s war on Gaza and this could be the reason why Intel has halted its expansion.
The massive war on the Gaza Strip has created an economic slump and a recession that would take years for Israel to recover from.
Thousands of stores are closing with Israeli companies suffering hundreds of millions of dollars, and the economic growth of Israel has shrunk by at least 20%.
The boycott calls in various countries have also badly affected Israel's economic. Israeli products have become so ashamed with the genocide its carrying out in Gaza, that companies are reverting to hiding the Israel tag-mark on their products so they can be sold in other countries.
A Bloomberg report last month revealed that the losses in the Israeli economy due to the ongoing war on Gaza for the past seven months amounted to approximately 60 billion shekels ($16 billion).
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