Following the chip shortage that came as a result of coronavirus lockdowns, chip makers such as Intel decided they needed to diversify where they operate. Just months after agreeing to open a site in Italy, the company is now announcing another investment, this time in Israel, Bloomberg reports.
According to the report, the deal has been “agreed in principle” but is still regarded as “preliminary”. Many of the details of the deal are not known, however, it will see Intel invest $25 billion to create thousands of new jobs.
The site of the new factory is expected to be in Kiryat Gat, south of Tel Aviv. Operations will reportedly begin in 2027 and will continue until at least 2035. Intel will also pay more tax under the deal, up from 5% to 7.5%, however, it will receive a government grant that represents 12.8% of the total investment.
Commenting on the deal, Israel’s finance minister, Bezalel Smotrich said:
“Intel’s decision to invest in Israel is an expression of confidence in the Israeli economy at a time of global uncertainty. The unprecedentedly large investment will affect the growth of the Israeli economy in the coming years and advance quality employment.”
Intel said that its expansion in Israel is part of its commitment to meeting future manufacturing needs and supporting its IDM (integrated device manufacturing) 2.0 model, which the company announced in 2021.
The expansion will build on a presence that Intel has had in the country since it began operating there in 1974. Right now, Intel currently employs about 12,000 workers in the Mediterranean country.
As mentioned at the top of the article, this deal is still considered preliminary so we should hear more about it over the coming months.
8 Comments - Add comment