Intel secures $3.25B Israeli gov't grant to build $25B chip fab in Israel amid ongoing tensions

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Intel to build a leading-edge fab in Israel.

Intel
(Image credit: Intel)

Intel on Monday announced plans to build a new fab in Israel that will cost $25 billion, the largest foreign investment that the country has ever seen. The manufacturing facility is set to come online in 2028, so it will use extreme ultraviolet (EUV) lithography, though it remains to be seen which process technologies it will support. Meanwhile, the company will get a $3.25 billion grant from the Israeli government to build the new fab, reports Reuters.

The upcoming Fab 38 will be located adjacent to Intel's existing fabs near Kiryat Gat, which is approximately 42 kilometers from the Gaza Strip. Intel expects the new fab to come online already in 2028 and operate until 2035. The new fab in Israel is a crucial element of Intel's strategy to diversify its supply chain and build a network of leading-edge fabs across all continents and countries, including the U.S., Europe, and the Middle East. 

"[The new fab is] 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," a statement by Intel reads. 

This new investment, which involves the construction of Fab 38 and supporting facilities, promises to further enhance Intel's operations in the country as well as Israel's high-tech exports. The company currently operates four development and production sites in the country, including the Fab 28 plant in Kiryat Gat, which employs about 12,000 individuals and indirectly supports an additional 42,000 jobs. The new fab will generate several thousands of additional jobs. Also, Intel has pledged to purchase goods and services valued at 60 billion shekels (approximately $16.6 billion) from suppliers in Israel over the coming ten years. 

Fab 28 produces chips on Intel 7 process technology (also known as 10nm Enhanced SuperFin). It is likely that Fab 38 will produce chips using Intel's post-18A fabrication node.

 

Anton Shilov
Anton Shilov
Contributing Writer

Anton Shilov is a contributing writer at Tom’s Hardware. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.

8 Comments Comment from the forums
  • rluker5
    Intel is doing a lot of building. They must have a lot of confidence.

    I'm not questioning their choices as they have surely done the research, but that noted 42km from the Gaza Strip sounds pretty small when you compare it to my average 10 speed bike ride this last summer of roughly the same distance. My drive to work is 56km. Imagine how clean and peaceful a cutting edge 2028 fab will be.

    Sometimes the world seems like a small place.

    And to help keep things non political, here's a picture of my average 10 speed bike:
    Reply
  • thestryker
    Intel is definitely spreading around a lot, and this mostly seems like a big investment in IFS success. They could afford to move along on manufacturing nodes when Intel is the vast majority of the fab business and any other is beholden to their whims, but if they want to compete with Samsung/TSMC they need big capacity for more nodes. We'll see over the next two or so years how many of these fabs get built out.
    Reply
  • KraakBal
    Another brilliant strategic decision by Intel. I am sure this will work out great 😭
    Reply
  • bit_user
    rluker5 said:
    And to help keep things non political, here's a picture of my average 10 speed bike:
    After too many brain-rattling bumps, I gave in and got a bicycle with both a front shock absorber and a block of squishy rubber to soak up bumps in the rear. Not as lightweight, but much more comfortable. At least I didn't go for an e-bike (though they were still niche, at the time).

    Then, also spent some serious money on a proper headlight for it, so I could more easily see (and dodge) potholes.
    Reply
  • bit_user
    This apparent contradiction can be explained by the fact that the forums are separate from the site's editorial content and decisions.

    Regardless of whatever the editors decide to publish on the main site, the forum moderators enforce the forum rules. Official forum rules are posted here:
    https://forums.tomshardware.com/threads/toms-hardware-official-community-rules.3653950/
    Reply
  • thisisaname
    Odd they say it is only going to operate for 7 years or is that how long it will be before they upgrade it rather than shut it down?
    Reply
  • rluker5
    thestryker said:
    Intel is definitely spreading around a lot, and this mostly seems like a big investment in IFS success. They could afford to move along on manufacturing nodes when Intel is the vast majority of the fab business and any other is beholden to their whims, but if they want to compete with Samsung/TSMC they need big capacity for more nodes. We'll see over the next two or so years how many of these fabs get built out.
    I'm a bit suspicious that the unexpectedly large manufacturing investments might be partially motivated by an inflation hedge of owning manufacturing assets. And that outside investors may be contributing to this as well. I'm no financial expert, but my property taxes this year went up by 23%, no improvements. I'm probably an outlier, but government's costs are going up as well as everyone else's and their contribution to the inflation feedback loop is often delayed. I also suspect inflation will continue to be higher than normal. I'm not an expert so hopefully I'm wrong on both counts.
    bit_user said:
    After too many brain-rattling bumps, I gave in and got a bicycle with both a front shock absorber and a block of squishy rubber to soak up bumps in the rear. Not as lightweight, but much more comfortable. At least I didn't go for an e-bike (though they were still niche, at the time).

    Then, also spent some serious money on a proper headlight for it, so I could more easily see (and dodge) potholes.
    I mostly bike the lonely highways by my house and they have a lot of rolling hills. The first thing I would look for in a new bike would be more than 10 speeds. Some of those hills can be a real hassle to get up and I usually have to put my full weight on the pedals on the lowest gear going up them. Having granny gears would make my leisure motivated bike rides notably more relaxing, but I would have to swallow a bit of pride and feel like a bit of a wuss. I'm pretty sure I'm basically the only one even aware of this so maybe after struggling up a few more hills in the spring I might give in and upgrade. Comfort or self centered pride. It sure would be nice to be perfect.

    Nice to hear of another biker in the forums.

    and the struggle is real:
    The speed on a rigid steel bike with 100+psi tires feels great, but it would probably feel almost exactly the same on an aluminum one with physical comfort features.
    Reply
  • bit_user
    rluker5 said:
    I also suspect inflation will continue to be higher than normal. I'm not an expert so hopefully I'm wrong on both counts.
    The Federal Reserve recently announced they expect to cut interest rates, in 2024. That's a very positive sign about their expectations of inflation. As far as I know, they still haven't revised their target of 2%. To be doing rate cuts, they must expect it'll be getting close to that.

    rluker5 said:
    Having granny gears would make my leisure motivated bike rides notably more relaxing, but I would have to swallow a bit of pride and feel like a bit of a wuss.
    As long as you don't get an e-bike, I think you have plenty to be proud of (no offense to e-bike owners who truly need the assistance). With any regular bike, you can at least say that 100% of the hill climbing effort would still be coming from your muscles.

    rluker5 said:
    Nice to hear of another biker in the forums.
    Just around town, when traffic is light.

    rluker5 said:
    and the struggle is real:
    Impressive!

    I have some hills around me. The first time I tried to go up one, I felt like I almost died. Then, I built up some more stamina before I tried again.
    Reply