Tech giant Intel is expected to invest some 40 billion shekels ($11 billion) to build a new manufacturing facility in Israel, Finance Minister Moshe Kahlon announced on Monday.
The Israeli government is expected to provide the corpotation with a grant of some 3.2 billion shekels, about 8 percent of what will be the largest single investment ever made in Israel.
Intel is expected to build the new plant alongside its present semiconductor manufacturing facility in Kiryat Gat, on a 75 acre plot just south of the existing plant. Intel has committed to adding another 1,000 to 2,000 new jobs at the new plant, which is scheduled to be completed within five years.
Currently, Intel Israel employs about 11,000 workers in manufacturing and research and development.
In the past, Intel has asked the government for grants to cover 10 to 15 percent of its capital investments in Israel, but was initially offered only 5 percent as a grant, plus another 5 percent corporate tax break in return for the promise of more jobs and a commitment to operate the new plant for at least 12 years. It eventually committed to 8 percent after negotiations.
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Kahlon said the government has been working with Intel for a year on the project and Intel management informed him of the “unprecedented” decision on Monday “that is expected to bring thousands of jobs to the south.”
The decision is not final, and still needs approval on Israel’s part from the Investment Center in the Industry and Economy Ministry, along with approval from a special committee from the Finance and Economy ministries and the Tax Authority.
The chipmaker reached an agreement in May 2018 year to invest about 18 billion shekels to upgrade its existing factory in Kiryat Gat between 2018 and 2020.
Intel did not disclose any details of the deal or its plans and schedule for now.