The Intel Corporation will invest $6 billion to upgrade its Kiryat Gat plant.
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In a move that is expected to create thousands of new jobs in Israel, American titan of the computer chip industry, Intel, has announced plans to upgrade its facility in Kiryat Gat. Located near Beer Sheva, Kiryat Gat has been home to an Intel plant for twenty years. Intel confirmed this week its decision to invest another $6 billion there.
However, it is yet to be seen whether the move means that Intel intends to manufacture its latest line of chips in Israel. In a statement the company merely said that it would, “upgrade the Kiryat Gat facility to meet future needs, ” without specifying any of the details on what exactly the money will be spent on.
There have been reports, though, that the expansion is intended to provide the space needed for new facilities to produce advanced 10 nanometer chips, which will power new wearable technology. The leaders of Israel’s government and three coalition partners are thrilled about the announcement. Prime Minister Benjamin Netanyahu said, “Israel is a focal point of global technology, and investing in it generates profits both to the investors and the citizens of Israel.”
Leader of the Jewish Home Party, Economy Minister Naftali Bennett whose ministry will be responsible for coordinating Intel’s expansion, said of the investment that it was, “the best gift we could ask for on our 66th Independence Day.”
Finance Minister Yair Lapid, who leads the Yesh Atid Party, stated that this is, “an expression of faith in Israel’s economy. These investments will create thousands of jobs directly for Intel, and tens of thousands of jobs in the rest of the economy. We will continue to help advance tech investments in Israel.”
Part of the sense of relief among Israel’s leaders stems from their previous concern that Intel might make the investment in its Irish facility instead. Only a month earlier it was revealed that the company had spent $5 billion over the previous three years in Ireland.
Eamonn Sinnott, general manager for Intel Ireland and vice president of Intel’s technology and manufacturing group is still optimistic about his country’s chances in a competition with Israel. In an interview with the Irish Independent magazine he said, “When it comes to the question of Intel wanting new capacity somewhere on the planet, we want to be able to put our hands up and say we’re ready. Having a good track record, a highly skilled workforce and an attractive taxation rate is very important. But so is having a series of permits already in place so that we can take advantage if or when it comes about. That’s what we got with what we call Fab 34 and the planning permission that Kildare Co Council gave us last year. And that sits now ready to be used if and when the corporation needs to use it.”
Intel might have settled on Israel in part because of the reported significant grants or serious tax concessions that it will get from the Israeli government as part of the agreement.
Israel has had an Intel plant now for almost forty years, starting with a Jerusalem facility. Today the two plants in Jerusalem and Kiryat Gat account for a combined 10, 000 jobs in Israel.