Factory for 25 billion dollars in southern Israel

An American electronics company is investing 25 billion dollars in a factory located only 24 km from Hamas-controlled Gaza.

Intel established its presence in Israel in 1974. In the mid-1990s, a large manufacturing facility was built in Kiryat Gat, which was then updated. The picture is from 2008. Photo: Kiryat Gat archive

Israel grants the American electronics company Intel 3.2 billion dollars for a new plant for electronic circuits. Intel will invest 25 billion dollars in the factory, which will be built in southern Israel.

The investment is the largest ever by a company in Israel. The news came as Israel became locked in war with the Palestinian militant group Hamas, in the wake of Hamas’ attack on Israel on October 7.

The expansion plan for the company’s Kiryat Gat facility where Intel already has an existing data chip plant is a “key part in Intel’s efforts to foster a more resilient global supply chain, alongside the company’s ongoing and planned manufacturing investments in Europe and the United States,” Intel said in a statement, reports Reuters.

“The growth of our Kiryat Gat facilities is a tremendous source of pride for our employees in Israel, and a reflection of their unwavering commitment to excellence,” said Daniel Benatar, vice president of Intel Israel, in a statement.

Three continents

Intel has invested billions of dollars in building factories across three continents to restore its leading position in chipmaking and better compete with its rivals. The new Israeli factory is the latest investment by the US chipmaker in recent years.

– Support from the Government of Israel will… ensure that Israel remains a global center for semiconductor technology and expertise, Intel Vice President Daniel Benatar emphasized.

Israeli President Benyamin Netanyahu hailed the investment as the largest ever by a global private company in the country. The Kiryat Gat plant, which is scheduled to open in 2028, will employ thousands of workers.

Agreement in principle this summer

Semiconductor giant Intel entered into an agreement in principle with the Israeli government to build the chip manufacturing facility in Kiryat Gat last summer.

Prime Minister Benjamin Netanyahu said at the time that the Intel investment was “unprecedented” in Israel and that the facility would use the most advanced technology in the world.

– This is an expression of great confidence in the Israeli economy and accurately reflects the strength of the free economy that we have built, and the technological economy that we are developing here.

As part of the deal, Intel will pay a tax rate of 7.5 percent, compared to the 5 percent the chipmaker pays to the state today, the finance ministry said in a statement. In addition, it was agreed this summer that Intel would receive a government grant of 12.8 percent of the investment amount under the Act on the Encouragement of Capital Investments.