Intel Announce Controversial 25 Billion Dollar Investment Deal With Israel

Intel has been forced into the spotlight after it announced a new billion-dollar investment in Israel, currently measuring at a staggering $25 billion.

The US chip maker confirmed that it will be expanding the Intel Kiryat Gat fab 28 for 2nm node technology in the south of Israel, marking the largest investment ever made between a company and Israel.

The expansion of the technology plant, which is already home to 3,900 employees and known as Intel's most advanced manufacturing facility, has already been backed by a $3.4 billion pledge from the nation's right-wing government.

According to the Vice President of Intel, Daniel Benatar, the "support from the Israel government will... ensure that Israel remains a global centre of semiconductor technology and talent".

The developments to the chip plant have been planned to start in 2028 and run until 2035.

While Intel has not yet commented on the type of technologies that will be in the fab, experts have predicted that, once expanded, the chip plant will be the most advanced facility – using the Intel 20A and 18A sub-2nm process technologies.

While other brands have distanced themselves from the controversial nation, the billion-dollar investment with Intel represents the chip maker's support and long-term engagement for Israel.

The Finance Minister of Israel, Bezalel Smotrich, told reporters: "This investment, at a time when Israel wages war against utter wickedness, a war in which good must defeat evil, is an investment in the right and righteous values that spell progress for humanity."

Since Hamas' unprecedented on-the-ground massacre and capture of Israeli civilians on October 7, the US has continuously promoted its standing with Israel.

As the death toll in Gaza exceeds 20,000 and the catastrophic humanitarian situation for Palestinian civilians gets worse each day, the US has become increasingly alone in its backing for the nation.

The conflict between Hamas and Israel has not only been detrimental to businesses in Israel but non-Israeli companies have also been targeted in pro-Palestinian movements.

Since the beginning of October, Israel's original $488 billion economy has reportedly buckled as the war with Hamas sends shockwaves and boycott movements through businesses.

Out of the 1,680 Israeli businesses that were surveyed, more than 70 per cent of them, reported that they had seen a drop of more than 70 per cent in revenue – with businesses claiming to have been endangered by the conflict on a scale that is similar to the effects of the COVID-19 pandemic.

The development of the southern Intel fab will act as a key assist to regrowing Israel's economy.

As part of Israel's strategies to encourage partnerships and investment in development areas, Intel will be greeted with large corporate tax benefits.

Instead of being charged the usual corporate tax rate, which stands at 23 per cent, the US chipmaker will pay a reduced sum of just 7.5 per cent.

After announcing the Israeli expansion, which will take place roughly 42km from the war-torn Palestinian territory, Intel said: "The expansion plan for the Kiryat Gat site is an important part of Intel's efforts to foster a more resilient global supply chain."

Intel's pact with Israel goes further than the fab development. According to reports, the American chip maker has committed to buying goods and services from Israel, adding to 60 billion shekels – equal to more than £13 billion.

The entire marks an extremely "important part of Intel's efforts to foster a more resilient global supply chain, alongside the company's ongoing and planned manufacturing investments in Europe and the United States" the US chipmaker said in a statement.

Intel has also announced that it has plans to launch new leading-edge fabs in Germany, Ohio and Arizona.