Report: Intel Pauses Construction on Its $25 Billion Fab in Israel

Intel is reportedly pressing the pause button on a $25 billion manufacturing project in Israel, though the company is yet to confirm or deny the reports. The company did issue a statement to the media saying projects of this size always depend on a wide variety of factors, implying the pause is somewhat beyond its control for now. It remains to be seen how long the project will be put on hold or if it is actually being paused, as Intel says the Israeli facility is a crucial component in its IDM 2.0 strategy, also known as “Five nodes in four years.”

The Register is reporting the pause in construction, noting Intel issued a statement reaffirming its commitment to the region. It said a multitude of factors control the scope and pace of such large-scale projects, indicating a crucial piece of the construction puzzle has run aground. “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,” reads a statement made by an Intel representative. However, Tom’s Hardware is reporting Intel might have just changed contractors, which could be the reason for the pause.

Intel’s Ohio fab has already faced numerous delays, pushing its launch date from 2025 back to 2027 or so.
Credit: Intel

The actual reason for this alleged pause is unknown. Still, the last bit about “capital management” might raise an eyebrow, indicating Intel may need additional funding for the project. The Register notes Intel has typically used private equity firms to help with its capital expenditures, but this project was also earmarked to receive $3.2 billion from the Israeli government. Intel is also juggling its commitments to its global expansion plans, and it’s already committed to spending up to $100 billion to catch up to TSMC.

The move by Intel comes at an interesting time for the company as it’s attempting to compete with rival TSMC by aggressively expanding its foundry business. Its IDM 2.0 strategy will technically be complete in 2025 when it produces the Intel 18A process, which it says will allow it to leapfrog TSMC regarding node performance and efficiency. However, it currently has many plates in the air with its aggressive expansion plans, and its all-new Ohio fab has been the subject of repeated delays already.