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Intel delays work on $25B Israel plant as tech sector feels impact of Gaza war

Israel’s tech sector has been impacted by the Gaza war as well as the government’s judicial reform plans and the global tech downturn.
I-HWA CHENG/AFP via Getty Images

Intel said on Tuesday Israel was a "key" manufacturing site for the company, yet did not deny reports that it was halting construction on a new factory there in another possible setback for the Israeli tech sector amid the Gaza war.

The Israeli news outlet Calcalist reported on Monday that Intel’s suppliers have received notices of contract cancellations regarding the supply of equipment and materials for Intel’s planned factory in southern Israel.

Intel is a Silicon Valley-based technology company and one of the largest manufacturers of semiconductor chips in the world. In December, the Israeli government agreed to provide the firm with a $3.2 billion grant to build a new $25 billion chip plant in southern Israel’s Kiryat Gat.

An Intel spokesperson told Al-Monitor on Tuesday that Israel "continues to be one of our key global manufacturing and R&D sites and we remain fully committed to the region," yet declined to say definitively whether plans for the new factory have been nixed.

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