Israel prime minister Benjamin Netanyahu announced that Intel (NASDAQ:INTC) will invest approximately $25 billion into a new chipmaking factory in the country. The factory expansion will upgrade its existing manufacturing facilities, focusing on wafer fabrication. The news comes on the heels of Intel seeking opportunities outside Asia.
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The factory is set to open in 2027 and operate through until at least 2035. Israel, which is one of Intel’s four major providers in the wafer fabrication segment, has accommodated the company’s operations since 1974.
Intel’s Expanding Footprint Across Geographies
The venture, marking Intel’s largest in Israel, includes a prior $10 billion investment announced in 2021. This is yet another effort by CEO Pat Gelsinger to have more manufacturing facilities outside Asia, which currently has a prominent position in chip production.
With strained relations between the U.S. and China over Taiwan, Intel and many other tech companies are looking to rework their global operations. Intel is also looking at operations expansions in Germany and Italy. Last week, Intel also announced an estimated investment of up to $4.6 billion in a semiconductor assembly and test facility in Poland amid rising demand. Construction on the site is slated to commence upon European Commission approval.
TSMC (NYSE:TSM) and Samsung are among the other companies that have recently expanded operations in the U.S.
In its Q1 earnings, Intel’s capital expenditure stood at $7.4 billion compared to $4.6 billion in the year-ago quarter. The funds as indicated will be used for worldwide manufacturing and assembly and testing, including investments in the process technology roadmap.
Is Intel a Buy, Hold, or Sell?
Of the 23 top Wall Street Analysts covering INTC stock, 15 rate it a Hold, four have a Buy, and four assign a Sell rating, taking the average analyst consensus rating to Hold. Further, analysts’ 12-month average price target of $31.30 marks a 12.9% downside potential.
Late last week, Morgan Stanley Analyst Joseph Moore raised the price target on the stock to $38 from $31, citing material artificial intelligence opportunity, This is offset by the impact of adjustments in cloud budgets amid higher AI spending levels, which led to Moore giving INTC stock a Hold rating.
In the past week’s trading session, the stock has gained 6.5%, taking the year-to-date gains to 38.3%. Notably, Intel stock is currently trading very close to its 52-week high levels.
