Israel

Intel To Make “Unprecedented” Investment of Nearly $11 Billion in Israeli Operations

Intel, the United States-based chip-making giant, will make an “unprecedented” 40 billion shekel ($10.9 billion) investment in its Israeli operations, Israeli Finance Minister Moshe Kahlon announced, The Jerusalem Post reported Monday.

“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,” made in consultation with the government, would likely create thousands of jobs in southern Israel.

Intel, which opened its first Israeli facility in Haifa in 1974, currently employs 11,700 people in Israel. Of those, 1,100 are employed by its autonomous driving subsidiary, Mobileye, which it bought for a record $15 billion in 2017.

Though Intel has not been specific about its plans, it is expected that the investment will be to build a new production plant in Kiryat Gat. The new facility is expected to be 370,000 square feet and employ at least an additional 1,000 people.

The Israeli government is expected to grant the chip-maker, 3 billion shekel ($816 million) as an incentive.

Intel also announced on Monday that its exports from Israel last year amounted to $3.9 billion, a $300 million increase over 2017. It is also estimated to have spent $1.7 billion purchasing local goods and services.

“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,” Yaniv Garty, the general manager of Intel Israel and a vice president at the company, 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.”

Last February, Intel announced a $5 billion expansion of the Kiryat Gat facility.

That expansion came on the heels of the company’s $6 million investment to upgrade the facility, that was announced in 2014 and inaugurated two years later, to produce advanced 10 nanometer chips. In return for that commitment, Intel received grants totaling $600 million and tax breaks through the year 2023.

Last June, Intel announced the launch of two eighth generation processors, both of which were developed in Israel.

With nearly 12,000 employees in Israel, Intel is the largest private employer in the Jewish state. At the end of 2017, Intel paid out bonuses equivalent to two and a half months salary to most of its Israeli employees. The bonuses, the company said, reflected both its success and profitability.

[Photo: wochit / YouTube ]