Intel Corp’s existing Kiryat Gat production facility . (photo credit: INTEL SPOKESPERSON DEPARTMENT)
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US technology giant Intel Corp is to invest an “unprecedented” NIS 40 million (approx. $10.9 billion) in the company’s Israel-based operations, Finance Minister Moshe Kahlon announced on Monday night, significantly expanding its multi-billion dollar presence in the country.
“This is huge news for everyone who cares about the State of Israel, the Israeli economy and Israeli citizens,” Kahlon said, adding that the “unprecedented decision” following a year of government efforts would likely create thousands of jobs for residents of the South.
While the Santa Clara, California-headquartered chipmaker has said it will “not publish details at this stage” regarding financial details, plans or a timeline for the investment, Israeli media reported that it is planning to use its largest investment in Israel to date to construct a vast production facility in the southern city of Kiryat Gat.
“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,” said Yaniv Garty, Intel VP and Intel Israel General Manager.
“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 new factory is expected to span some 370,000 square meters, and the land will be allocated by the government without having to go through a tender process. The facility is likely to grow Intel’s already-large local workforce by at least 1,000 employees.
According to Yediot Aharonot, the Israeli government has agreed to grant Intel NIS 3 billion ($816 million) over 15 years in return for the investment.
Today, Intel employs 11,700 workers across Israel and a further 1,100 individuals through its Jerusalem-based Mobileye subsidiary, acquired by the company for $15.3b. in 2017 – the largest sale, or “exit,” of an Israeli company to date.
Intel also announced Monday that its exports from Israel in 2018 totaled $3.9 billion, an increase of $300 million compared to 2017, in addition to local procurement of materials and services – primarily in the periphery – worth $1.7 billion.
“Intel’s choice to continue to significantly invest in Israel is an important expression of confidence in the State of Israel and the Israeli economy,” said Economy Minister Eli Cohen, who in December 2018 alluded to Intel making a further significant investment in the country.
“We see Intel as a partner for progress and its renewed choice to invest in Israel strengthens the economy and employment in Israel, and we expect that this collaboration will also continue into the future.”
Last month, the Knesset’s Finance Committee announced it would give Intel an NIS 700 million ($190 million) grant in return for investing an additional $5 billion in its existing Kiryat Gat factory, and hiring an expected 250 new employees and purchasing domestic products worth NIS 2.1 billion ($570 million).
Symbolizing the company’s decades-long and multi-billion dollar collaboration with Israel, estimated to be worth approximately $50 billion once the latest investment is finalized, Intel held its annual high-level strategic meeting in the country for the first time last year.
“I think we are proving in our cooperation that the future belongs to those who innovate,” Prime Minister Benjamin Netanyahu told interim Intel CEO Robert Swan and senior executives during their visit, marking almost 45 years since the company first established a presence in Israel in 1974.
“Intel is an innovation company, Israel is the innovation nation. I think we have just begun,” Netanyahu said.
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