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Intel (INTC) is receiving $3.2 billion worth of incentives from the Israeli government, with the chipmaker planning to spend $25 billion to build a chip plant in the country. It's the latest effort by a chipmaker to expand its production outside of Asia. Yahoo Finance Live breaks down the announcement.
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Video Transcript
- Intel receiving a $3.2 billion grant from the Israeli government for a new $25 billion chip plant that it plans to build in the country. Now this is the largest investment ever by a company into Israel. Intel has been looking to diversify manufacturing out of Asia, which currently dominates chip production. Shares are seeing a boost on this news this morning. You're seeing shares higher by about 2% right now.
And continuing to think about how much capacity Intel is actually going to be bringing online both here in the US, being able to tap into some of the billions of dollars that have been earmarked for more of that production to be brought domestically here. But also it matters where these companies are internationally and being able to service other key orders that may come through outside of the domestic production that's set to come online.
- Yeah. And let's not forget, Intel is going through a well, they've had to retool and they've had to, under Pat Gelsinger, they've really been trying to modernize and update their strategy for the next decade, and doubling down on chip fab, given the problems that we saw with the production lines, that's now turning out to be a much more viable solution than it was probably in the infancy when these things were being floated, sometimes I think even pre-pandemic but don't quote me on that.
So if we go to the YFi Interactive, I thought it'd just be fun to chart the year in semiconductor stocks. And here we see NVIDIA, that's a kahuna. That's up 234%. Taiwan Semi up 38% here. There is an intraday chart. But here's Intel, 81%. And if you take a look at the long-term, let me just put a max chart. This is going to go to the late 80s. And you can see it's been a very, very sideways trading market since this is the .com boom and bust right here. And it's right back in the middle of its range. But this is quite the comeback off of those lows. And I'm interested to see how the story turns out.
- And I'm interested to see what this company has to say at CES. They're going to be there from January 9 to 12. We know we're going to have our own coverage that's encapsulating and really surrounding what's taking place in Las Vegas, perhaps there'll be some self-driving cars out there. Perhaps our own Dan Howley will be able to hold up a chip, a fabricated chip, I don't know.
But for Intel and their presence, they're really going to be focusing on artificial intelligence, focusing on computing, promoting some of the interconnectivity there. So we'll see how shares move once they make some of those announcements to kick off next year as well. That's just a light teaser, a snippet of a tease, for some of our coverage at CES that's coming your way next month, start off the new year.