Intel confirmed today it has submitted plans to expand its chip manufacturing operations in Kiryat Gat, Israel.
The investment will amount to close to 18 billion shekels (US$5 billion) and will be made between 2018-2020. Intel agreed to spend 3 billion shekels on local suppliers. In return, the chip giant will see its reduced tax rate of 5 percent extended until 2027. Additionally, the Israeli Finance Ministry is also considering awarding a 700 million shekel (US$194 million) grant to Intel, 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 is one of the biggest employers and exporters in Israel, so the company has a strong negotiating position.