# Israel is courting TSMC, Samsung, and Intel to build a cutting-edge chip fab on its soil > Source: > Published: 2026-07-23 11:35:10+00:00 # Israel is courting TSMC, Samsung, and Intel to build a cutting-edge chip fab on its soil The country's $1 billion AI directorate wants 2-nanometer chips, 100,000 GPUs, and a seat at the global semiconductor table within five years 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 Middle Eastern competition Askal’s directorate operates with a current budget of $1 billion, with plans to scale that to $1.5 billion by 2027. The strategy involves a mix of tax incentives and positioning the government as an anchor customer. Askal has acknowledged competitive pressure from Gulf states, particularly the UAE and Saudi Arabia. For a country with limited electricity resources and a fraction of the land mass of its regional competitors, the play has to be about quality and specialization rather than raw scale. ## Why crypto and digital asset investors should pay attention Israel is already home to a disproportionate number of blockchain startups and Web3 companies relative to its population size. A domestic chip fab and expanded GPU cluster would give those companies access to compute resources without depending entirely on foreign supply chains. There’s also a geopolitical dimension. TSMC alone produces roughly 90% of the world’s most advanced chips, almost all of it on an island that sits in one of the most geopolitically sensitive regions on Earth. Every new fab that comes online outside of Taiwan, whether in Arizona, Dresden, or now potentially Israel, marginally reduces that concentration risk. The risk factors are real. Israel’s limited electricity resources could constrain the pace of buildout. The 27-gigawatt backlog at the Electricity Authority signals that demand is far outrunning supply, and 1 gigawatt of new capacity won’t close that gap. Competition from Gulf states with deeper pockets and fewer energy constraints adds another variable. **Disclosure:** This article was edited by Editorial Team. For more information on how we create and review content, see our [Editorial Policy](https://cryptobriefing.com/editorial-policy/).