For the first time since Intel’s decision to build a fab in Kiryat Gat some 20 years ago, a new chip factory is planned for construction in Israel, in Ashkelon. The plan has been initiated by Yaron Ashkenazi’s Canadian defense-tech investment company Awz, in which former IDF Chief of Staff Aviv Kohavi, former Israel Police chief Roni Alsheikh, and former Canadian Prime Minister Stephen Harper act as advisors.
This is an ambitious plan, the total investment in which could reach NIS 40 billion, for the establishment of a complex that includes R&D centers, a silicon wafer manufacturing plant, and an assembly, testing, and packaging plant, which will cover a total area of 70,000 square meters in the Ashkelon industrial zone, and will have 350 employees including 150 in R&D. The initiative is only in its early stages, and according to estimates, the fund is in the process of raising capital to purchase the land
Awz, a veteran defense-tech fund that has so far raised $500 million for venture capital investments, plans to develop the plant for dual-use applications – that is, to designate the production of some of the chips for the defense industries and the defense system in Israel – so that the emphasis in the plant’s activities will be reflected in deep-tech technologies and photonic chips. However, the chips will also be suitable for commercial industries in Israel such as the automotive sector, communications, quantum computing and medical devices. According to the Awz announcement, the immediate investment will reach NIS 5 billion, in cooperation with the Ministry of Economy and Industry, the Ashkelon Municipality, the Ministry of Finance, the Israel Lands Authority (ILA), and the Israel Innovation Authority.
Startups and academic institutes will be able to access the facilities
The plant plans to develop and produce chips that are critical for AI infrastructure, quantum computing, 5G and 6G communications, and a variety of strategic security applications. Awz, “This is the first private plant of its kind in Israel to produce chips based on chemical compounds from the V-III family integrated on silicon and other substrates.” It added that the plant will operate in a hybrid manner, allowing for the merging and upgrading of production lines with other plants in Israel and abroad, and in an open format that will also allow startups and academic institutes to access it.
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Awz founder and CEO Yaron Ashkenazi said, “The chip plant will be the beating heart of a new national deep-tech center that will be established in the Tera Park industrial zone in Ashkelon, with a total investment of NIS 5 billion of which NIS 3 billion will be in the first phase. It joins Awz’s previous investment totaling more than NIS 2 billion over the past 8.5 years in Israeli startup companies developing groundbreaking deep-tech technologies with dual use – defense and commercial.”
The groundbreaking ceremony for the chip plant this morning in Ashkelon was also attended by Minister of Economy and Industry Nir Barkat, Minister of Economy and Industry director general Moti Hagay, and Ashkelon Mayor Tomer Glam.
Published by Globes, Israel business news – en.globes.co.il – on November 13, 2025.
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