Chipmaker Intel to halt $25-billion Israel plant, news website says

[Daniel Nenni]

FILE PHOTO: Intel logo·Reuters

JERUSALEM (Reuters) - Intel Corp is halting plans for a $25-billion factory in Israel, Israeli financial news website Calcalist said on Monday, in a report that the chipmaker did not confirm or deny.

The U.S. company, asked about the report, cited the need to adapt big projects to changing timelines, without directly referring to the project.

"Israel continues to be one of our key global manufacturing and R&D sites and we remain fully committed to the region," Intel said in a statement.

"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," it said.

Israel's government in December agreed to give Intel a $3.2-billion grant to build the $25-billion chip plant in southern Israel.

Intel has previously said that the factory proposed for its Kiryat Gat site, where it has an existing chip plant, was an "important part of Intel’s efforts to foster a more resilient global supply chain" alongside the company’s investments in Europe and the United States.

Intel operates four development and production sites in Israel, including its manufacturing plant in Kiryat Gat called Fab 28. The factory produces Intel 7 technology, or 10-nanometer chips.

The planned Fab 38 plant was due to open in 2028 and operate through 2035.

Intel employs nearly 12,000 people in Israel.

Chipmaker Intel to halt $25-billion Israel plant, news website says

Intel Corp is halting plans for a $25-billion factory in Israel, Israeli financial news website Calcalist said on Monday, in a report that the chipmaker did not confirm or deny. "Israel continues to be one of our key global manufacturing and R&D sites and we remain fully committed to the...

finance.yahoo.com

 

[hskuo]

If this is true, another bad sign for intel.

 

[Maximus]

If this is true, another bad sign for intel.

I remember a good quote: "Pat find to get government funding is the easiest part of his job."

 

[hist78]

The reasons:

1. Too many fabs but not enough customers and commitments.
2. Not enough money to match subsidies required by various governments.
3. Deteriorating financial standings even with Brookfield and Apollo cash infusion.
4. Shrinking demand of Intel products.
5. Need to improve financial performance before a possible restructure or spinoff.

 

[hskuo]

The reasons:

1. Too many fabs but not enough customers and commitments.
2. Not enough money to match subsidies required by various governments.
3. Deteriorating financial standings even with Brookfield and Apollo cash infusion.
4. Shrinking demand of Intel products.
5. Need to improve financial performance before a possible restructure or spinoff.

My one penny reason: Defocus approach in market losing situation will face reality and be forced to converge gradually.

 

[SemiFunctional]

This tool a looooong time to get to the papers.

I suspect the reasoning for this delay is that Intel are waiting for the situation out there to calm down.

Putting a leading edge technology that could make or break the company just a 20 minute drive from the Gaza strip might be too much of a risk.

 

[hskuo]

This tool a looooong time to get to the papers.

I suspect the reasoning for this delay is that Intel are waiting for the situation out there to calm down.

Putting a leading edge technology that could make or break the company just a 20 minute drive from the Gaza strip might be too much of a risk.

Alway Money talk.

 

[Blue Devil]

Not sure why this is a surprise to anyone. Intel needs to prioritize new capex in the US and Europe where the important foundry customers will be, certainly not in war zones.

 

[Barnsley]

https://www.calcalistech.com/ctechnews/article/kp3fpswld

 

[siliconbruh999]

Just my 2 cents the ratio of the cost of the fab to subsidy is too low compared to Germany or US as well and Israel is not the safest best for future fabs with the current scenario I think it is a good decision to not out a fab there for time being also they don't need have the customers to warrant that many fabs

 

[Daniel Nenni]

This could also be a negotiating tactic to get more government money. Given Israel is at war it is a difficult time for that negotiation.

 

[milesgehm]

https://www.calcalistech.com/ctechnews/article/kp3fpswld

“Sources around Intel explain that over the years, Israel has accumulated extensive knowledge in production processes and factory establishment, knowledge that is lacking in the USA or Germany.”

How can Intel lack knowledge in the USA about fab startup and process?

 

[nghanayem]

https://www.calcalistech.com/ctechnews/article/kp3fpswld

Actually reading the article it is not as bad as first impressions would have had me believe. F38 sounds to be full steam ahead while F48 gets paused until they have a better understanding of factory loadings near the end of the decade. I don’t know why the press is referring to F48 as the second cleanroom of F38, but oh well. Obviously this is not good, but it isn’t necessarily apocalyptic either. If there isn’t an understanding of when and what process will need F48, it is just better to stop and evaluate. I don’t know if F48 is able to support the larger high-NA tools. If it cannot this presents a good opportunity to modify the shell so F48 can support those tools (assuming intel believes that their network will have sufficient i3/18A capacity to meet current internal and external contracts without F48).

“Sources around Intel explain that over the years, Israel has accumulated extensive knowledge in production processes and factory establishment, knowledge that is lacking in the USA or Germany.”

How can Intel lack knowledge in the USA about fab startup and process?

Of all the fabs in intel’s factory network Israel has gone the longest since doing a start up, so I assume that statement was in reference to Ohio and German greenfield sites. People moving to Ohio is nothing new. Intel has had job applications for Ohio on their career site for a couple of years and all of these jobs list that the applicant will be working/learning at other intel sites until Ohio is ready to start spinning up. Plucking some veterans from across the network to go with these folks just makes sense.