Intel has secured a $3.2 billion grant from the Israeli government to expand its chip manufacturing plant in Kiryat Gat, a city in the south of the country.

In order to secure funding from the government, Intel has pledged it will secure $16.5bn worth of goods and services from Israeli suppliers over the next decade.

Intel has been operating in Israel since 1974 and currently has four development and production sites in the country. The company’s Fab 28 facility in Kiryat Gat produces 10nm chips and employs 11,700 workers. Construction for the plant’s expansion is already underway, with the cost of the project expected to total around $25bn.

In a statement reported by the Times of Israel, Intel said: “The expansion plan for the Kiryat Gat site 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.”

These investments include $30bn for the company to build semiconductor fabrication facilities in Germany and $4.6bn for a semiconductor assembly and test site in Poland. Intel has also broken ground on a $20bn chip manufacturing plant in Ohio, with production at the facility expected to start in 2025.