Intel submits plan for $5 billion expansion in Israel

Intel Corp. said on Tuesday it had submitted plans to expand its production operations in Israel, with the government saying the US chipmaker will invest about $5 billion.

Intel is one of the biggest employers and exporters in Israel, where many of its technologies are developed. The new investment will upgrade its Kiryat Gat manufacturing plant, the company said.

Intel did not provide financial details.

The Finance Ministry said the company would invest about NIS 18 billion ($5b.) in the factory between 2018 and 2020 and had agreed to spend NIS 3b. on 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,” the ministry said.

In return, Intel will be granted an extension of its reduced tax rate of 5% until 2027. The Finance Ministry said it was also considering giving Intel a NIS 700 million grant, with a second grant of the same size to come with future investments.

“This is to incentivize the company to carry out the future investment that could be significantly higher than past and current investments,” the ministry said.

Intel said it exported $3.6b. of goods and services from Israel in 2017, about 8% of the country’s total hi-tech exports. (Reuters)