Israel's Ministry of Defense has signed a strategic deal worth $115 million with Israeli company SemiConductor Devices (SCD) for the development and manufacture of advanced infrared sensors, including short wave (SWIR), medium wave (MWIR) and long wave (LWIR).
The expansion of the manufacturing infrastructure in Israel, which is being led by the Ministry of Defense Directorate for R&D (DDRD) (MAFAT), will allow production of infrared solutions for advanced applications, including spatial control, aerial payloads, space systems and large-scale security platforms, while integrating innovative manufacturing methods and technologies. This deal represents another pillar in the strategy of the Ministry of Defense director general to strengthen Israel's defense production base and to fully support all the needs of the IDF, both in the current campaign and in the future..
Israel's capabilities in the field of chips
The international chip field is particularly challenging, because Taiwan Semiconductor Company (TSMC), which controls the bulk of the market with 64.9% of global revenue, followed by Samsung, with 9.3% of revenue.
Israel has some local capabilities due to players like Tower Semiconductor Ltd. (Nasdaq: TSEM; TASE:TSEM), whose share of global chip industry revenue in the third quarter was 1% according to Statista, making it the seventh largest in the sector). Smaller players include SCD, controlled by Rafael and Elbit, and Gal-El, controlled by the Ministry of Defense, Rafael and Israel Aerospace Industries (IAI) Elta unit.
Israel's domestic industry had already been shaken up even before US President Donald Trump returned to the Oval Office, when his predecessor Joe Biden decided about a week before leaving the White House to include Israel on the list of countries to which the US would restrict exports of graphics processors.
SCD deals in detectors for surveillance, ground control, homing heads and binoculars. Israeli companies account for about 40% of the revenue of the only company on the market in Israel with detectors up to 4 megapixels.
During the Iran operation in June, SCD VP business development and marketing Shai Fishbein told 'Globes" that Israeli customers are pushing the company to make breakthroughs. "This is due to years of experience and high operational capabilities. In the field of the platforms themselves, there is a global leadership, and we work with companies like Elbit, Rafael and Israel Aerospace Industries. We enable surveillance and intelligence in any weather, at all hours of the day."
According to Fishbein, the success of Israeli defense industries in the moment of truth has two main effects. "On the direct level, these are systems that have proven themselves in operational activity. A customer sees a difference between a system on paper and one that has gone out into the field and brought proof, and not only proof, the results are also excellent. This doubles the power for Israeli companies to present unmanned aerial vehicles and drones."
Published by Globes, Israel business news - en.globes.co.il - on September 1, 2025.
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