Intel to spend $6b. in Israel’s biggest-ever tech investment
Sep. 23, 2014
Intel appears set to produce its next generation of chips in Israel with the largest-ever foreign investment in Israeli tech. Under a deal announced by the Finance Ministry Monday, Intel will spend $6 billion to upgrade its Kiryat Gat plant to enable production of next-generation computer chips. In return, Intel will get grants of up to $600 million over the next five years, as well as a major tax break through 2023.
For Israel, it’s worth the expense, said Finance Minister Yair Lapid. “Intel’s investment is a strategic asset for Israel,” he said, adding that it “provides additional proof of Israel’s capabilities in high-tech and innovation.”
The announcement signals the end of the drama that has surrounded Intel’s manufacturing plans over the past several years, as the company considered where to build a new plant to produce advanced 10 nanometer chips. The chips will power wearable technology and perceptual computing devices, which Intel believes will be a major growth area for the company in the coming years.
While critics might complain that the government is giving too much away, Intel International Senior Vice-President and CEO of Intel Israel Mooly Eden said that such deals are common today. “The government here, like governments everywhere, knows how the game is played,” and the jobs that are generated by investments in development centers are well worth it for Israel – especially when it comes to Intel, Eden said in a recent interview. “Over the years Intel has invested $10.8 billion in Israel. Last year, Intel Israel was responsible for more than 9% of Israel’s tech exports, which account for half of overall exports, except for diamonds.”
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