Last December, the multinational Intel had announced it would invest an additional $15 billion in an expansion at its chip factory in Kiryat Gar, southern Israel.
However, recently the technology giant announced that it would reverse the measure. Although Intel did not offer any explanation for its decision, they did point out in a statement that “Israel remains one of our main manufacturing and research and development sites worldwide. , and we remain fully committed to the region.”
Furthermore, they added that “managing large-scale projects, especially in our industry, often involves adapting to changes in schedules,” and that their investment decisions were always based on market dynamics, responsibility in capital management and commercial terms.
Despite the reduction in investment, the expansion of the installation of Kiryat gat be functional by 2028 and remain operational until at least 2035. A significant part of the buildings, including the pile casting and the first floors, have already been completed.
The chips that power PCs around the world have been manufactured at the company's Kiryat Gat plant for more than 20 years, and Intel has had a presence in the country for 50 years and currently employs about 12.000 employees.
Although the main cause of this decision by the multinational Intel is surely the more dangerous situation due to the current war in Gaza, in recent years Intel has seen how competition has eaten up a lot of ground in markets where until recently it was number one. . In recent years AMD has sold better processors at the same final price for the consumer, and the same is happening with processors for the business market, where before Intel was even more the undisputed number one. Now, competition from processors based on the ARM architecture has also been added, such as those manufactured by Apple for all its devices, processors that have replaced those from Intel, or other very competitive ARM processors are being presented for home computers and laptops, also for company servers. Furthermore, with the emergence of Artificial Intelligence there has been another great change in the market, the importance of the main processors has been relegated by other specialized ones for AI and by graphics cards or GPU processors, where the company Nvidia is the undisputed leader for years and now it is growing like foam. This being the case, it would not be strange for Intel to be rethinking investments, or to be thinking about cutting costs to withstand the downpour, or foreseeing a future in which it will definitely end up relegated.