Israel is courting TSMC, Samsung, and Intel to build a cutting-edge chip fab on its soil

Israel’s National Artificial Intelligence Directorate is in active talks with TSMC, Samsung Electronics, and Intel to build a semiconductor fabrication facility capable of producing chips at 2 nanometers or smaller. Erez Askal, the directorate’s leader, has called the failure to secure a fab a “very big failure.” The five-year sprint Israel’s plan includes developing a data center cluster capable of supporting 100,000 GPUs within five years, which would place the country on par with the largest planned AI gigafactories in the European Union. A $300 million AI data center already opened in Modi’in in October 2025, equipped with 4,000 Nvidia GPUs. About 25% of that facility’s capacity has been earmarked for a national supercomputer under the Israel Innovation Authority. The Israeli cabinet approved fast-track measures for AI data centers on February 22, 2026, removing regulatory barriers that had been slowing construction. Prime Minister Netanyahu called it a “major breakthrough.” Construction targeting 1 gigawatt of electricity capacity is already underway. Israel’s Electricity Authority currently has a backlog of 27 gigawatts in data center requests. Money, military expertise, and ...