Israel’s government approved a transfer of roughly NIS 1 billion, approximately $333 million, to the defense budget on August 9. The bulk of the money, some NIS 850 million ($283 million), was pulled from grant allocations originally earmarked for Intel’s semiconductor expansion in Kiryat Gat.
The funds were sitting untouched. Intel froze further construction and investment milestones at the facility back in June 2024 as part of a broader global spending review, and the project hasn’t resumed since.
How Intel’s biggest-ever Israel deal stalled out
The grants trace back to a 2023 agreement between Intel and Israel that was framed at the time as the largest corporate investment in the country’s history. The deal committed Intel to a significant expansion of its high-tech manufacturing footprint in Israel, with the government pledging billions in financial incentives to sweeten the arrangement.
Intel received an initial NIS 1.5 billion ($500 million) in 2024 to cover early project stages. A subsequent NIS 1.3 billion grant that had been slated for 2025 was already canceled. Now NIS 850 million of the remaining allocation has been rerouted to defense.
