Pro-Hamas demonstrators in Istanbul, Turkey, carry a banner calling for Israel’s elimination. Photo: Reuters/Dilara Senkaya

Irrespective of Israel’s wars against Hamas and Hezbollah, Intel, the semiconductor giant, recently confirmed a $25 billion investment in Israel, leveraging Israel’s brain power, which has enhanced Intel’s competitiveness in the global market. Over the last 50 years, Intel has invested more than $50 billion in Israel, establishing four research and development centers, despite the potential for wars and actual wars and terrorism. Now Intel will expand its Israeli chip factory, in order to diversify its manufacturing potential amid a chip arms race.

Challenged by a unique environment — top heavy on terrorism and war, but low on natural resources and rainfall — Israel has bolstered its do-or-die state of mind, with a defiance of odds, risk-taking, patriotism, a can-do attitude, and out-of-the-box mentality. This has yielded a robust flow of game-changing commercial, defense and dual-use technologies.

Israel entered the current wars with positive economic indicators, such as debt-to-GDP ratio in the low 60% (compared with 123% in the US), and all-time high foreign exchange reserves of $200 billion.

Intel’s $25 billion investment in Israel is driven by Israel’s unique competitive edge, as detailed in this October 23, 2023, report by the St. Louis-based Stifel Investment Bank ($390BN asset management), which said:

We believe that there are several key factors supporting the resilience of the Israeli market in the face of conflict, and the confidence of large multinational companies making large acquisitions in Israel, including during wars.

We [Stifel Investment Bank] have analyzed the impact of 4 previous Israeli conflicts with a range of both duration and gravity including the 2014 Gaza War – Operation Protective Edge, the 2008 Gaza War – Operation Cast Lead, the 2006 Lebanon War, and the 2nd Intifada (2000).

Our analysis examines the impact on the Tel Aviv Stock Exchange (TASE) as well as strategic transactional activity during and following the respective conflicts.

The analysis reveals very strong resilience in the face of such Israeli market shocks, and with the exception of the 2nd Intifada (2000) — which was highly correlated to the dot-com bubble — the impact of historical conflicts on TASE have been minimal with the TASE experiencing single digit or negligible conflict related impacts, and an almost immediate rebound and strong short and long term performance post conflict….

Israel’s economy will also survive the Oct. 7 massacre and the Jewish state’s wars of self-defense in response, and Israel will thrive afterwards.

Intel’s CEO, Patrick Gelsinger, told Fox Business that, “The Israeli people are the most resilient people on earth.” How right he is.

The author is a commentator and former Israeli ambassador.