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US chip maker Intel has confirmed a new $25 billion (€22.6 billion) investment in Israel, which is called the largest ever made by a company in the country. 

As part of the deal, Intel has received a $3.2 billion (€2.9 billion) grant from Israel’s government for the new chip-making plant. 

The US chip maker’s show of support and long-term engagement comes at a time when Israel’s war with the Palestinian militant group Hamas is escalating, triggering rising pressure from the US on Israel to minimise harm against civilians in Gaza. 

“This investment, at a time when Israel wages war against utter wickedness, a war in which good must defeat evil, is an investment in the right and righteous values that spell progress for humanity,” said Finance Minister Bezalel Smotrich to Reuters. 

The chip-making giant has been present in the country for over 50 years and is Israel’s largest private employer and exporter. 

The investment plans have been announced previously in June 2023 by the Ministry of Finance, but the chip maker has only officially confirmed it on Tuesday. Following the announcement, the shares of Intel rose more than 5% on Nasdaq.

The new plant, expected to create thousands of new jobs, is going to serve as an extension of the existing Kiryat Gat manufacturing facility, some 42 km from the war-torn Gaza. The chipmaker has also committed to buy 60 billion shekels (€15 billion) worth of goods and services from Israeli suppliers over the next ten years. 

The project is an “important part of Intel’s efforts to foster a more resilient global supply chain, alongside the company’s ongoing and planned manufacturing investments in Europe and the United States,” said the company in a statement.

Intel declined to say what technology will be produced at the new Fab 38 plant, which is expected to start operations by 2028.