June 11, 2024 /SemiMedia/ -- According to reports, Intel is suspending the expansion of a factory project in Israel, which had originally planned to invest an additional $15 billion in the chip fab.

Intel said in December last year that it would expand its $10 billion construction plan for the Kiryat Gat fab currently under construction in southern Israel. The $25 billion project is expected to receive a $3.2 billion grant from the Israeli government. It was originally expected to start production in 2028 and operate until at least 2035.

Intel responded in a statement that there are many dependencies in a project of this scale that have led to work delays, and said Israel remains one of Intel's major global manufacturing and R&D bases and it will continue to be fully committed to the development of the region.

“Managing large projects, especially in our industry, often requires adapting to changing timelines. Decisions are based on business conditions, market dynamics and responsible capital management,” Intel added.

Israel is the third-largest country by asset size where Intel operates factories, after the United States and Ireland, according to Intel's annual report.

Intel has been operating in Israel for 50 years, has nearly 12,000 employees and operates a research center in Haifa.