Technology
Intel Postpones $25 Billion Semiconductor Plant Construction in Israel
Jun
Intel Corporation has announced the postponement of its ambitious $25 billion semiconductor manufacturing facility in Israel. Sources familiar with the situation revealed that the decision stems from the company’s efforts to regulate its multi-billion-dollar investments in factories planned worldwide.
Temporary Deceleration, Insider Sources Reveal
According to insiders who preferred anonymity, the deceleration in Intel’s agenda is temporary. One source mentioned that the company communicated the delay to select suppliers last month.
Intel’s slowdown, though concerning, may be a passing phase, as hinted by undisclosed insiders, according to Barron’s Print Edition.
Intel’s Assurance and Adaptability
An Intel representative reiterated the company’s dedication to Israel and surrounding regions, emphasizing adaptability amid large-scale projects. They highlighted evolving schedules, business circumstances, and market dynamics as key considerations.
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CEO’s Strategic Approach
CEO Pat Gelsinger is actively seeking external financing for Intel’s ambitious endeavors, which could amount to tens of billions of dollars over several years. This strategy, termed “Smart Capital,” aims to control expenses effectively. Recently, Intel agreed to divest a 49% interest in its Irish facility to a private equity firm for $11 billion.
Israel Facility: A Strategic Move
Intel’s plans for the Israeli facility were initially disclosed last year, partially subsidized by $3.2 billion in incentives from the Israeli government. The company aims to expand its production capability, attracting clients interested in fabricating their designs within Intel’s facilities. This strategy mirrors the success of Taiwan Semiconductor Manufacturing Co. and is expected to bolster Intel’s position in the chip industry.
Reports of Suspension
Earlier this week, Israeli daily Calcalist reported the suspension of the project, citing suppliers notified of contract cancellations.
Government’s Expectations and Commitments
The Israeli government had urged Intel to commence operations at the facility by 2028, sustaining them until at least 2035. Additionally, Intel pledged to spend 60 billion shekels ($16.2 billion) with Israeli suppliers over the coming decade.
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