Amidst the charged political atmosphere in Israel, Intel is reportedly reconsidering its massive $25 billion investment plan for a new chip factory in the country.

The Israeli financial news website Calcalist broke the news on Monday, although the tech giant has remained tight-lipped, neither confirming nor denying the report.

While skirting around the specific project, Intel did acknowledge the need for flexibility in managing large-scale endeavours. "Adapting to changing timelines is often a necessity when handling big projects, especially in our industry," a company statement read. "Our decisions hinge on business conditions, market dynamics, and responsible capital management."

The statement, however, reaffirmed Intel's commitment to Israel, calling it "one of our key global manufacturing and R&D sites."

Last December, the Israeli government had agreed to provide Intel with a generous $3.2 billion grant to construct the $25 billion chip plant in southern Israel. The proposed facility, dubbed Fab 38, was expected to commence operations in 2028 and operate until 2035, bolstering Intel's efforts to fortify its global supply chain resilience.

Intel's existing footprint in Israel is significant, with four development and production sites, including the Fab 28 manufacturing plant in Kiryat Gat, which currently produces the company's 10-nanometer chips. The company employs nearly 12,000 people in the country.

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