Intel to spend $550 million in Israel through 2020
Dec. 23, 2014
Intel has promised to spend at least $550 million in Israel in the next five years. The sum is part of a commitment by the company to spend a total of $6 billion to upgrade its Kiryat Gat plant for the manufacture of new advanced chips for its next generation devices. Intel and the Economy Ministry’s Industrial Cooperation Authority announced the deal on Sunday.
The $550 is part of Intel’s offset purchase arrangement with the state, which is providing the company with grants of up to $600 million over the next five years as well as a major tax break through 2023. Intel is set to receive two $300 million grants, distribution of which will be spread over five budget years. More valuable for Intel is likely to be the fact that it will have to pay a corporate tax of only 5% through 2023 (the standard rate of company tax in Israel in 2014 was 26.5%). In return, Intel committed to hiring at least 1,000 new employees, at least half of whom will be residents of communities in southern Israel. In addition, the company promised to spend at least $550 million over the period.
Mooly Eden, Intel international senior vice president and CEO of Intel Israel, says such deals are very common among countries – like Israel and Ireland, which competed for the new Intel upgrade. “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.”
For the full article on The Times Of Israel click here.