Highlights:

  • Intel revealed that construction work on the new facility has already commenced.
  • As per Intel, the facilities will be integral parts of a chip manufacturing “megasite,” with potential investments totaling up to USD 100 billion over time.

Intel Corp. secured a USD 3.2 billion grant from the government of Israel for a new USD 25 billion chip fab construction project.

The company recently disclosed the agreement. Intel’s tax rate will rise from 5% to 7.5% per its terms. As per Reuters, the chipmaker was presented with an option for a reduced grant and lower tax rate. However, they opted for a more significant grant with a higher tax rate.

Intel employs about 12,000 people across four campuses in the country. One of those campuses is a chip plant called Fab 28 in the southern city of Kiryat Gat. According to Intel, the new USD 25 billion fab it’s constructing will be close to the existing facility.

The company revealed that construction work on the new facility has already commenced. The upcoming chip plant, Fab 38, is anticipated to generate thousands of jobs upon its launch in 2028. Its operations are scheduled to extend until 2035.

Intel revealed in late 2022 that Fab 38 is slated to be ten times larger than its current Kiryat Gat plant. Reportedly, the facility will be supported by pillars and a metal frame strategically designed to maximize space for manufacturing equipment. The equipment is allegedly expected to include EUV machines sourced from ASML Holding NV.

EUV machines, each costing up to USD 200 million, intricately carve transistors into silicon wafers utilizing laser light beams. Earlier this year, Intel initiated mass production of chips using such systems at its fab in Leixlip, Ireland. The fab manufactures seven-nanometer central processing units designed for servers and personal computers.

Intel’s current Kiryat Gat fab produces chips using a less advanced ten-nanometer node. Due to the inclusion of EUV equipment in the new USD 25 billion plant under construction, the company may be able to produce chips based on more advanced processes. The seven-nanometer node employed by Intel at its Leixlip fab is part of the company’s plan to introduce several EUV-powered processes to enhance its manufacturing capabilities in the coming years.

Earlier, Intel collaborated with investment firm Brookfield Asset Management to expand its chip manufacturing campus in Arizona. The USD 30 billion project entails constructing two new fabs at the site, dedicated to producing chips using Intel’s upcoming Intel 20A, or five-nanometer, process.

The company previously revealed plans to construct two additional fabs in Ohio, with an estimated cost exceeding USD 20 billion. As per Intel, the facilities will be integral parts of a chip manufacturing “megasite,” with potential investments totaling up to USD 100 billion over time. The company is set to invest more than USD 33 billion in constructing a pair of fabs in Magdeburg, Germany.