Police were forced to step in and disperse the crowd protesting against the blasphemy as similar protests in the past have led to street violence.
A spokesperson for Intel said that Intel was operating within the law and would continue to do so.
"Intel has been operating in Jerusalem for 24 years and therefore this plant does not represent a change to the status quo," spokesman Koby Bahar said, adding that the plant would operate in "accordance with our business needs and the law, including on Saturdays."
Intel, the world's biggest chip manufacturer, opened the west Jerusalem plant for installation work before its inauguration. With a workforce of 150 employees, the new plant will prepare dies as part of the wafer production.
Apart from the fact that Intel Israel is one of country's largest exporters, Intel also operates four research and development centres in the country.