(CTN News) – Israel’s government will provide a $3.2 billion grant for Intel’s new $25 billion chip plant in southern Israel, marking the largest-ever investment by a company in Israel.
This deal demonstrates major support and Israel’s government amid the ongoing conflict with Hamas. The expansion of Kiryat Gat site is crucial for strengthening its global supply chain. Shares have already seen a 1.9% increase in pre-market Nasdaq trading.
Intel has been making substantial investments worldwide under CEO Pat Gelsinger to compete with rivals like AMD, Nvidia, and Samsung. Intel also plans to invest over $33 billion in two chip-making plants in Germany and potentially $100 billion in a chip-making complex in Ohio.
Rival companies like Samsung and TSMC have also announced significant investment plans in the United States.
Israel’s finance and economy ministries have emphasized the significance of investment in the chip industry, stating that it serves as a strong vote of confidence in Israel’s economy.
The direct fiscal benefits from this investment are expected to surpass the state’s grant. Finance Minister Bezalel Smotrich highlighted the importance of this investment, describing it as an investment in righteousness and progress for humanity.
In addition to the grant, Intel has committed to purchasing goods and services worth $16.6 billion from Israeli suppliers over the next ten years, and the new facility is expected to create thousands of job opportunities.
Intel has been in Israel since 1974 and has four sites there. One of these sites, Fab 28 in Kiryat Gat, specializes in producing 7 technology. It employs around 12,000 people and indirectly supports 42,000 more jobs.
Intel’s exports from Israel contribute $9 billion, accounting for 5.5% of the country’s high-tech exports. In 2017, Acquired Mobileye for $15.3 billion. Intel is currently building a new plant, Fab 38, but has not disclosed what technology it will produce.
Prime Minister Benjamin Netanyahu announced that would invest $25 billion in a new chip plant, which has now been confirmed by Intel.