The Israeli government is providing a $3.2 billion incentive for Intel’s new $25 billion chip factory in Kiryat Gat, southern Israel, where the company already has a chip-making facility.
According to a statement, Intel’s Israeli plant expansion is an important element in its effort to promote “a more resilient global supply chain,” which also includes manufacturing investments in Europe and the United States, Reuters reported.
Intel’s announcement confirmed Israeli Prime Minister Benjamin Netanyahu’s statement in June that Intel’s spending on the plant will be $25 billion, the country’s biggest foreign investment ever.
Intel’s investment covers five years, during which it will enjoy a reduced 7.5 percent corporate tax rate instead of the standard 23 percent.
Daniel Benatar, Intel vice president, said the grant will provide an opportunity to “ensure that Israel remains a global center of semiconductor technology and talent.”
With the grant, Intel is committed to purchasing $16.6 billion worth of Israeli goods and services over the next 10 years. During the past 50 years, Intel has received about $2 billion in Israeli incentives for its other facilities in the country.
Intel started its Israeli operations in 1974 and currently runs four development and manufacturing locations in the country including the Kiryat Gat factory. The plant makes 10-nm chips and has almost 12,000 employees.