Intel’s $25 billion Expansion to Israel

$Intel (INTC.US)$ is planning to build a new manufacturing plant in Israel as part of their broader efforts to expand production sources beyond Asia. The new plant will produce wafers, a key segment where Israel already plays a crucial role for Intel.

The investment in the Israeli plant is valued at $25 billion, making it the largest foreign investment in Israel to date. This project is expected to create several new jobs, adding to Intel's existing workforce of nearly 12,000 in the country, and is anticipated to start operations by 2027 and stay operational until at least 2035. In return, Intel agreed to pay an increased tax rate of 7.5% in Israel, up from its current rate of 5%.

Recently, Intel also announced a $4.6 billion facility in Poland, and Micron Technology Inc. is reportedly close to committing $1 billion towards a new factory in India. These investments demonstrate the semiconductor industry's global drive to diversify its supply chain, especially given current US-China tensions.

Intel's expansion is likely to qualify for significant government grants, with many countries offering incentives to ensure a secure and job-creating supply of chips within their territories. Similarly, Intel is set to receive nearly $11 billion in subsidies from the German government for a chip manufacturing complex.

Intel also continues to increase its footprint in Ireland, investing an additional $12 billion to expand manufacturing space. Once completed, this will bring Intel's total investment in Ireland to over $30 billion.