Global tech giant Intel will establish a new factory in Israel in the city of Kiryat Gat with a huge investment of about 25 billion dollars.
Finance Minister Bezalel Smotritz and Budget Commissioner Yogev Gardos informed Prime Minister Binyamin Netanyahu and Economy Minister Nir Barkat of the new factory today (Sunday).
The two were informed that the lengthy negotiations conducted between the Intel company and the professionals in the Budget Division of the Finance Ministry have been successfully concluded and agreements in principle have been reached regarding the company's intention to invest approximately 25 billion dollars in the establishment of the new factory in Kiryat Gat.
As part of the investment, the company is expected to employ thousands of additional workers in Kiryat Gat at wages higher than the average in the manufacturing industry. In addition, it was agreed to significantly increase the tax rate that the company will pay to the state from the current 5% to 7.5%. As part of its commitments, Intel is expected to finish the investment and begin operating the plant by 2027 and continue to operate it until at least 2035.
This investment is unprecedented in scope. According to the Finance Ministry, it will yield significant macroeconomic benefits to the economy, especially in view of the slowdown in the global economy and the global competition to attract technology companies in general and chip manufacturing companies in particular. In addition to this, the investment has direct fiscal benefits for the state in significantly higher volumes than the grants that will be given.
The ministry agreed to give the company a grant to carry out the investment in order to encourage capital investments in the amount of 12.8% of the total worth of the investment. The company's obligations to meet the goals are a condition for receiving the grant. After the agreement was reached in principle, the formal approval procedure will begin, which is expected to take several weeks.
Netanyahu congratulated the ministry on the deal. saying: "I welcome this tremendous achievement for the Israeli economy - NIS 90 billion - the largest investment by an international company ever in Israel. This is a great expression of confidence in the Israeli economy, in stark contrast to all the false reports against us."
Finance Minister Smotrich said: "The choice of the international company Intel to make this investment in Israel is an expression of confidence in the Israeli economy at a time of global uncertainty. This investment of unprecedented magnitude in the State of Israel will affect the growth of the Israeli economy in the coming years and will promote high-quality, productive and high-wage employment in the communities of the periphery."
Budget Commissioner Yogev Gardos said: "Intel's investment, amounting to approximately NIS 90 billion, will yield significant economic benefits for the State of Israel in general and the southern region in particular. I thank the management of Intel Israel and the professional team in the budget department, led by Deputy Director Kfir Battat, for managing the procedure. The negotiations with the company were conducted in a lengthy and professional manner on the basis of economic models to examine the benefits of the investment with the aim of maximizing the value for the Israeli public while promoting the investment in Israel in the face of the various alternatives available to the global company Intel."
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