Tech giant Intel Corp will invest a hefty $11 billion over the next five years on a new semiconductor fabrication plant in Israel.
Israeli Finance Minister Moshe Kahlon secured the deal in a meeting Monday night with Intel Israel production plant CEO Daniel Benatar and Yaniv Garty, general manager of Intel Israel.
“Intel’s global management has informed us about its decision to invest another 40 billion shekels ($11 billion) in Israel, an unprecedented decision that is expected to bring thousands of jobs to the south [of Israel],” Kahlon said on Twitter.
The news follows a commitment by Intel in May last year to invest about $4.9 billion to upgrade its existing factory in the southern Israeli city of Kiryat Gat between 2018 and 2020. The new plant will also be located in Kiryat Gat.
The investment equates to $2.17 billion per year—around 0.7 percent of Israel’s gross domestic product, which will have a tangible impact on the country’s growth numbers in the coming year.
The country agreed to allot some 90 acres to the new plant.
Israel competed with bids from Singapore and Ireland, where Intel had also considered opening the aforementioned plant, said Kahlon. According to the deal, Intel will receive a 10 percent tax incentive.
“You cannot expect corporations to invest in Israel today because of Zionism. They come because it’s worth it for them,” the finance minister told Israel Hayom.
Economy and Industry Minister Eli Cohen said: “Intel’s decision to continue investing significantly in Israel is an important vote of confidence in Israel and the Israeli economy. [The company’s] activities in Israel in the fields of research and development and advanced production support the policies of the Economy and Industry Ministry to increase exportation and create quality jobs in general; in the periphery in particular.”
“We view Intel as a partner on this path and its repeated decision to invest in Israel strengthens the economy and employment in Israel and we expect this cooperation to continue into the future. More than 320 foreign companies operate in Israel and they contribute greatly to its growth, innovation, exportation and employment,” said Cohen.
The chipmaker said that it will not disclose any details, including the schedule, costs and technologies of the new project in Israel.
Santa Clara, Calif.-based Intel is one of the biggest employers and exporters in Israel, where many of its new technologies are developed.