Intel is submitting plans to expand its Israeli production operations. Israel’s Finance Ministry confirms their plans; they say that Intel’s investment will be USD five billion.
Intel is one of the largest companies in Israel, with much of its R&D happening there. Their new investment will upgrade Intel’s Kiryat Gat production factory in southern Israel. The US-based chipmaker exported USD 3.6 billion worth of goods and services out of Israel in 2017 alone. This contributes up to eight percent of Israel’s total high-tech exports.
Israel’s Finance Ministry says the agreement will have Intel investing 18 billion shekels (USD 5 billion) in the factory between 2018-2020 as well as another 3 billion shekels worth of investment into local suppliers.
“According to company officials, this investment is expected to pave the way for a future significant investment for a technological upgrade at the Israeli site,” says the finance ministry.
Intel are providing the investment as this move means Israel reduces their tax rate to five percent until 2027. The finance ministry are also considering giving two grants worth 700 million shekel to the tech giant.
“This is to incentivize the company to carry out the future investment that could be significantly higher than past and current investments,” says the finance ministry.