Your tax dollars at work.
The gutless corporation that is Intel who were recently criticized for sweeping their unstable processors under the rug with falsified PL1/PL2 “default” configurations and defrauded the US Government through the CHIPS Act in a bid to reclaim industry leadership for their foundries, is once again at the center of controversy.
Late last year, we reported that Intel received a $3.2 billion grant from the Israeli government to establish and expand a cutting-edge chip production facility, “Fab 38.” Scheduled to open in 2028 and operate through 2035, this new factory was set to produce Intel’s most advanced silicon wafers, with an estimated investment cost of around $25 billion.
Despite receiving a massive subsidy from the Israeli government, Intel has halted construction of its planned factory, according to local Israeli news reports. Calcalist and several other news sites reported today that Intel instructed a local infrastructure construction firm to pause work on the project indefinitely.
In a statement to Reuters, Intel tacitly acknowledged the delay but insisted it remains committed to Israel, where it employs nearly 12,000 workers and operates several research facilities in the region.
“Managing large-scale projects, especially in our industry, often involves adapting to changing timelines. Our decisions are based on business conditions, market dynamics and responsible capital management,”
The delay is attributed to the need to “adapt big projects to changing timelines.” According to Intel’s annual report, Israel is the company’s third-largest operation by asset size, following the United States and Ireland. Intel has been active in Israel for fifty years, recently shifting focus towards research and development alongside chip manufacturing, starting with their 10nm process node.
The development of their 10nm process faced significant delays and immaturity, contributing to the stagnation seen from the 6th to the 10th generation Core processors, all built on the same 14nm process due to Intel’s repeated failures to deliver on their ambitious 10nm node.
Intel has been operating in Israel since 1974 and currently maintains four development and production sites in the country. The existing Fab 28 facility in Kiryat Gat produces 10nm chips and employs approximately 11,700 workers.
Intel has not provided a timeline for resuming construction but hinted at “capital management” considerations, suggesting they are reassessing the best way to fund the project. The company has ambitious plans for global chipmaking infrastructure expansion, requiring billions in investment.
However, for now, Intel has effectively walked away with a substantial subsidy from the Israeli government, which is significantly funded by the $4 billion in annual military aid from the United States, so basically, your tax dollars have been used for suspended construction.
The expansion in manufacturing capacity is part of Intel CEO Pat Gelsinger’s strategy to “restore” Intel’s status as a leading chipmaker. To date, Intel has committed over $100 billion to compete with the world’s leading chip manufacturer, TSMC. This includes halting new facility constructions like the recently canceled high-end R&D complex in Haifa, Israel which was turned into a parking lot.
Considering Intel’s ARC graphics cards are produced using TSMC’s silicon, and their decision to use TSMC fabs for processor production beginning with Lunar Lake, the future of Intel’s foundries looks bleak. This situation raises questions about the effectiveness and transparency of the CHIPS Act and related subsidies and Intel’s future in the semiconductor industry.
