Jerusalem, Israel - Intel, the US semiconductor giant, announced an agreement in principle with the Israeli government to invest a staggering $25 billion to build the world’s most advanced chip manufacturing plant in Kiryat Gat. With this agreement, the company has set an unparalleled record of investment in Israel, showcasing its confidence in the economy and the technology market of the country.
Israeli Prime Minister, Benjamin Netanyahu, extolled the investment as "unprecedented," further remarking that the substantial investment will be utilized to build a chip manufacturing facility, using the most advanced technology, which would create countless job opportunities.
The agreement between Intel and the Israeli government is a landmark one, as Intel will pay an increased tax rate of 7.5%, from its current rate of 5%. The company will also receive a subsidy of 12.8% of the amount under the Encouraging Capital Act (ECIL). These mutually beneficial plans will result in economic benefits for the entire state, especially the southern region of Israel.
The factory in Kiryat Gat is expected to be operational by 2027 and operate until at least 2035, providing jobs to thousands of workers with above-average pay-grades.
“Intel's investment will bring enormous economic benefits to the entire State of Israel, especially the southern region," said Budget Commissioner Yogev Gardos. "The negotiations with the company are based on economic models to examine the benefits of investments to maximize value for the Israeli public, while promoting investments in Israel in response to Intel's globally available alternatives."
Intel has been involved In Israel since 1974, with over $17 billion in investments, three R&D centers in Haifa, Petah Tikva, and Jerusalem, and a manufacturing facility in Kiryat Gat. The company employs 11,700 people directly in Israel and creates indirect jobs for about 42,000 employees across the country.
"Intel's intent to expand manufacturing capabilities in Israel is in response to meeting future manufacturing needs and supporting the company's IDM 2.0 strategy. We are grateful to the Israeli government for their continued support," stated Intel in an official statement.
In last year's $650 million acquisition of Israel-based computing technology startup Granulate and the 2017 purchase of Jerusalem-based self-driving tech maker Mobileye for over $15 billion, Intel has shown a growing interest in Israeli technology. Intel credits a future full of self-driving vehicles to Mobileye technology. Mobileye has recently become an unquestionable part of Intel's global business operations.
Intel also recently revealed that Intel Israel's exports in 2022 alone will amount to a record-breaking $8.7 billion, accounting for 1.75% of Israel's entire GDP and 5.5% of all Israeli high-tech exports. Moreover, Intel Israel purchased $3.5 billion of goods and services from Israeli businesses in 2022, a 60% increase on the $2.2 billion spent in 2021.
This investment is a substantial contribution to the booming tech industry of Israel, characterized by innovative technology, notable talent, and exceptional economic growth.
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