Intel earmarks massive $5 billion for new investment in southern Israel plant
search

Intel earmarks massive $5 billion for new investment in southern Israel plant

Investment plan comes on heels of $6 billion upgrade of the same facility announced by Intel in 2014 for production of Intel's next generation computer chips

Intel CEO Brian Krzanich delivers a keynote speech at CES International, January 8, 2018, in Las Vegas. (AP Photo/Jae C. Hong)
Intel CEO Brian Krzanich delivers a keynote speech at CES International, January 8, 2018, in Las Vegas. (AP Photo/Jae C. Hong)

Intel Corp. plans to invest a massive $5 billion to expand its Kiryat Gat chip manufacturing plant by 2020, the Ministry of Economy and Industry said on Wednesday.

The investment plan comes on the heels of a $6 billion upgrade of the same plant in southern Israel announced by the company in 2014, to enable the production of Intel’s most advanced next generation computer chips, reportedly the 10 nanometer chips. In return for that investment, Intel got grants of up to $600 million from Israel, as well as major tax breaks through 2023.

The plans for the new $5 billion investment were presented to Economy Minister Eli Cohen by Intel’s management team on Wednesday. Intel intends to apply for tax benefits and grants under the Encouragement of Capital Investments Law, and a committee to review whether the firm will be eligible for benefits under the law is expected to meet in the next month, the ministry said.

The Calcalist business news website forecast the firm is expected to get up to half a billion dollars in benefits and grants from the government.

“Intel’s choice to continue to significantly invest in Israel is an important sign of faith in Israel and in its economy,” Cohen said in the statement. Intel’s R&D and advanced manufacturing activities in Israel are in line with the ministry’s strategy to increase exports and create high quality jobs in Israel and in particular in the country’s periphery, he said.

The US chipmaker’s decision to invest in Israel comes amid growing competition among nations to attract foreign investment and amid concerns that a new tax reform implemented by US President Donald Trump will make it more attractive for businesses to set up and expand their activities in the US. Prime Minister Benjamin Netanyahu set up a panel of experts earlier this year to weigh the impact of the reform on local investments. There are some 320 foreign companies operating in Israel today, according to data provided by the economy ministry.

“We see Intel as a partner on our journey,” Cohen said, and the company’s decision to once again invest in Israel “strengthens our economy” and employment levels.  Cohen added he expects the partnership to continue in coming years.

Since starting its activities in Israel in 1974, Intel has invested some $17 billion in Israel and employs today some 11,000 workers in its manufacturing plant in Kiryat Gat, and in its R&D centers in Jerusalem, Petah Tikva and Haifa. In addition, the firm employs some 1,000 workers at Mobileye, the Jerusalem-based auto technology firm that it acquired last year for a whopping $15 billion.

The US semiconductor giant had exports of some $3.6 billion from Israel in 2017, according to company data.

read more:
comments