The semiconductor giant Intel confirmed on Wednesday that it would invest $25 billion to expand a chip factory in southern Israel after a $3.2 billion grant from the government there, moving ahead with a major investment in a country currently at war.
Expanded operations at the existing manufacturing site in Kiryat Gat, northeast of Gaza, are set to begin by 2028 and last through at least 2035, and are expected to create thousands of jobs.
“The expansion plan for the Kiryat Gat site is an important part of Intel’s efforts to foster a more resilient global supply chain,” Intel said in a statement.
Israel’s prime minister, Benjamin Netanyahu, announced a preliminary version of the deal during a cabinet meeting in June, calling the Intel investment the largest ever in Israel.
“This is an expression of great confidence in the Israeli economy and exactly reflects the strength of the free economy that we have built here, and the technological economy that we are developing here,” Mr. Netanyahu said at the time.
Intel, which currently employs 11,700 people in Israel, is the country’s largest private employer. Over the last 50 years, it has built four development centers in Israel and invested more than $50 billion in the country, according to the company.
The investment is the latest sign that chipmakers are seeking to diversify their manufacturing globally amid a chip arms race. In August, Intel and Tower Semiconductor, an Israeli chip manufacturer, terminated a planned merger after China’s antitrust regulators failed to rule on the transaction.