The giant American technology company will build 40 billion shekel plant at its Kiryat Gat site, adding thousands of jobs to the South.
By Batya Jerenberg, World Israel News
Finance Minister Moshe Kahlon announced Monday night that Intel Corporation has agreed on terms for the biggest investment ever made by a single business in Israel. The company will invest 40 billion shekels ($11 billion) in building another chip-making plant next to its current one in Kiryat Gat.
“We have been working on this for a year, and here are the results: Intel’s global management has informed us this evening about their decision to invest another 40 billion shekels in Israel. This unprecedented decision will bring thousands of jobs to the south. This is massive news for everybody who cares about Israel, the Israeli economy and Israel’s citizens,” Kahlon tweeted.
Due to its expected massive injection into the Israeli economy, the government has agreed to partially offset the building costs. According to Yediot Ahronot, the grant will total about eight percent — 3 billion shekels – over 15 years. Intel will receive an additional five-percent corporate tax break.
The decision is now pending the formal approval of various government ministries as well as the Tax Authority.
This is not the first time that Israel has encouraged Intel with monetary benefits for investing in the country. This newly greenlighted venture comes on the heels of last year’s announcement that the company would be expanding its current production plant to the tune of 18 billion shekels ($5 billion) over two years. The Israeli government sweetened the deal then as well, with an NIS700 million grant and a five-percent tax rebate through 2030.
One of the conditions was that the global company would purchase over 3 billion shekels worth of local services and supplies as well as adding 250 personnel to its workforce.
Although not yet providing financial or other details of the company’s brand-new project, Yaniv Gary, Intel’s Vice President and its Israeli general manager, expressed great satisfaction with the deal.
“Our continued confidence in Intel’s future and excellent partnership with the State of Israel is at the foundation of the business plan we will submit,” he said. “This plan, when it comes to fruition, is expected to yield great economic and social value for Israel in general and for Kiryat Gat in particular.”
The global semiconductor manufacturer already employs almost 12,000 people, mostly in the southern town it has called home since 1999. They work both in research and development and in manufacturing. Its two current massive fabrication plants produce chipsets and microprocessors as well as servers, workstations, laptops and desktop computers. The new investment is expected to add over a thousand employees to its roster.
Intel’s 75-acre site in Kiryat Gat is almost like a small city unto itself. It has laundry and dry-cleaning services, a travel agency, ATM machines, a daycare facility and a fitness center, among other amenities. It is also involved in community life in various ways, including the sponsorship of technology education programs for teachers and computer clubhouses for students.