Intel’s $1bn in Israeli growth

Intel’s $1bn in Israeli growth

Intel will receive grant aid of about $1bn (€875m) from the Israeli government for its latest investment plan to expand its chip manufacturing operations in the country, Israel’s finance minister has said.

Finance minister Moshe Kahlon said that he was informed by the chip giant (which is already one of the biggest employers and exporters in Israel, where many of its new technologies are developed) that it would invest about 40bn shekels (€9.5bn) in a new factory.

Earlier this week, California-based Intel said that it would submit a business plan to the government of Israel “for continued investment in the company’s Kiryat Gat manufacturing site” in central Israel, but did not disclose details, including the schedule, costs, and technologies.

The moment the company comes to Israel and invests $10bn, and it receives a grant of 9%, that means 91% of it stays here

- Mr Kahlon said in an interview on Israel’s Army Radio.

“There are always such discounts, there are always incentives,” he said.

This is in addition to a 700m shekel grant that the company will get in return for a separate, $5bn expansion of its production operations in Israel.

Intel Plant, Leixlip, Kildare
Intel Plant, Leixlip, Kildare

Last month, Intel said that it had begun plans for site expansion projects in Ireland, Israel, and at its US plant in Oregon, starting in 2019.

Its is looking to diversify its products for a broader set of customers, such as auto safety and wireless connections for mobile phones.

Mr Kahlon’s spokesman told Reuters that the government and Intel had agreed on the size of the grant after talks regarding the new factory had intensified over the past year.

He noted that grants were crucial for Israel to compete for investment with countries such as Ireland.

The expansion is expected to add 1,000 new employees to Intel’s workforce of nearly 13,000 in Israel, the spokesman said.

Economy minister, Eli Cohen, said that it was the biggest investment of its kind ever in the country, adding it would “strengthen the economy and employment in Israel”.

Intel’s exports from Israel rose by $300m in 2018 to $4bn, while it bought $1.7bn of products from local companies.

The company, along with Israel Chemicals and Teva Pharmaceutical Industries, accounts for close to half of Israel’s industrial exports.

Reuters

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