Intel and Tower Semiconductor Invest Billions in Ireland and Japan, Not Israel
Tower Semiconductor and Intel, both operating manufacturing plants in Israel, have announced multi-billion dollar investments to expand their production capacities outside Israel. Tower, headquartered in Israel, plans to invest approximately $3 billion to increase its manufacturing capabilities in Japan. Intel declared a 5 billion euro investment to expand its facility in Leixlip, Ireland. Both investments aim to meet growing demand for components used in data centers and artificial intelligence systems and benefit from government support in the respective countries.
Tower updated its financial model for 2028, raising revenue targets from $2.8 billion to $3.6 billion and net profit goals from $750 million to $1.2 billion. The expansion in Japan involves increasing 300mm wafer production capacity, with full production readiness expected by Q4 2027, supported by about $1 billion in Japanese government grants. Tower currently employs around 2,400 workers in Japan, nearly double its Israeli workforce, and the Japanese operations generated $204 million in revenue last year, representing 13% of total income.
Intel's €5 billion investment in Ireland will enhance production and R&D for processors used in servers, data centers, and AI. This contrasts with Intel's Israeli plant in Kiryat Gat, which produces older 7nm and 10nm chips and is not slated for expansion. Intel halted work on a new advanced plant in Kiryat Gat (Fab 38) in 2024 amid financial pressures and is focusing on expanding existing sites in Ireland, Arizona, and New Mexico. Intel recently regained full ownership of its Irish plant after repurchasing shares from Apollo Global Management and plans to raise over $6 billion in new debt to fund this.
These moves highlight a global semiconductor industry trend where government incentives and existing infrastructure heavily influence investment decisions. Countries like Japan, Ireland, and the U.S. are investing billions to secure advanced chip manufacturing on their soil. For Israel, despite its historical role as a semiconductor hub, these developments underscore challenges in attracting future capital investments. Intel stated that expansion plans in Israel remain under review and will depend on customer demand.
The investments do not necessarily indicate a withdrawal from Israel but emphasize the gap between current operations and future growth centers. Tower and Intel continue significant manufacturing activities in Israel but prioritize locations offering stronger government support, infrastructure, and faster production ramp-up capabilities.
