[News] Israel Reportedly Withdraws $425M Intel Grant as Kiryat Gat Expansion Remains Uncertain

While Intel is benefiting from surging CPU demand and has announced a €5 billion (US$5.7 billion) investment to expand its Ireland fab, its previously planned expansion in Israel remains uncertain. According to CTech, Israel has canceled a NIS 1.3 billion ($425 million) grant for Intel in 2025 after the chipmaker paused expansion plans at its Kiryat Gat site, raising fresh concerns over the future of one of Intel’s largest manufacturing hubs outside the U.S.

Citing data from the Finance Ministry Accountant General Department’s State Budget Execution Report, the report notes that the full 2025 grant allocated to Intel had been withdrawn. However, a NIS 1.06 billion ($346 million) grant for 2026 reportedly remains in the state budget and has not been canceled, suggesting that Israel’s broader support for Intel remains in place.

According to CTech, Intel Israel said the company’s plans are still under review. As previously reported by Reuters, the Israeli government has committed $3.2 billion in grants to support Intel’s planned $25 billion fab expansion in Kiryat Gat.

According to Reuters, Intel maintains four R&D and manufacturing sites across Israel, including its Fab 28 facility in Kiryat Gat, which produces chips based on the company’s Intel 7 process node. The company’s planned Fab 38 expansion, per the report, was slated to come online in 2028.

Intel’s Israel operations have faced mounting challenges in recent years. According to Tom’s Hardware, the chipmaker launched a broad round of layoffs in the country in 2025, including around 200 employees at its Fab 28 campus near Kiryat Gat. The site employs roughly 4,000 of Intel Israel’s more than 9,000 workers, with the company’s local workforce expected to stabilize at around 8,500 employees following the cuts, the report adds.

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(Photo credit: Intel)