Intel invests $25bn to expand semiconductor production in Israel

A chip factory in Germany and a packaging and testing facility in Poland are not the only plans for Intel in the coming years. The US processor giant intends to invest billions of dollars in Israel.

Here's What We Know

Israeli authorities have confirmed that Intel will expand processor and chipset production. By 2027, a new factory will appear in Kiryat Gat next to the existing site. The venture will create several thousand jobs in the country. Intel has been operating in Israel for almost 50 years and currently provides jobs for about 12,000 locals.

The company has research centres and a state-of-the-art silicon wafer processing plant in Israel. Intel is investing $25 billion to expand chip production, which would be a record for Israel.

The Kiryat Gat plant will operate until at least 2035, eight years from launch. According to Israel's Finance Ministry, the US company now pays a 5% tax, and the new agreement calls for an increase to 7.5%.

Whether Israel will subsidise the construction of the plant has not yet been reported. For example, Germany is offering the company almost $11 billion in benefits, while the cost of the plant would be more than $18 billion. It is possible that Intel will claim a maximum 12.8% refund on the money spent, that is, just over $3 billion on an investment of $25 billion.

Source: Bloomberg