Intel Corporation has announced that it is pausing the construction of its new $25 billion microchip factory in Israel. The decision was reported by Calcalist and confirmed by Intel, citing the need to adapt to changing project schedules. Despite not explicitly mentioning the report, Intel emphasized its commitment to Israel as a key manufacturing and research site globally.
The construction suspension notice was sent to Sicho Infrastructure Company, the overseeing construction firm for the expansion of Intel’s Kiryat Gat microchip facility. This suspension comes after the approval of a $3.2 billion grant from the Israeli government to Intel for the construction of next-generation facilities, which was seen as a significant investment.
The proposed factory, Fab 38, was intended to enhance Intel’s capacity to produce advanced microchips, crucial for its global supply chain resilience. Intel currently operates multiple sites in Israel, including Fab 28 in Kiryat Gat, which manufactures Intel 7-powered chips. The new factory was expected to expand Intel’s presence in the country, bringing economic benefits and technological advances.
The decision has stirred reactions from advocacy groups like the Boycott, Divestment and Sanctions (BDS) movement, which views Intel’s pause in construction as a victory for its cause. The BDS movement has criticized Intel’s continued involvement in Israel and plans to intensify its #BoycottIntel campaign, citing ethical concerns amid ongoing tensions in Gaza.
Meanwhile, the Israeli economy is facing challenges, with indicators of economic decline worsened by geopolitical instability. Moody’s recent downgrade of Israel’s credit rating and negative outlook reflect growing economic pressures, including rising debt and structural deficits.
In conclusion, Intel’s suspension of the construction of its new microchip factory in Israel has raised questions and sparked reactions from various groups. The decision comes amidst economic challenges facing Israel and ongoing ethical debates surrounding international companies’ involvement in the region.
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