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Intel firms up $6bn Israeli plant upgrade

Intel’s love affair with the Israeli tech sector is on track to continue after the country confirmed that a new multi-million investment from the firm is on the horizon.

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The US computer chip specialist is splashing out on an upgrade to its massive semiconductor plant in the southern town of Kiryat Gat and the country’s economy minister Naftali Bennett admitted that the price-tag could eventually reach $6 billion [£3.55 billion].

“We competed with the whole world and Intel chose us,” Bennett said, according to Haaretz. “In the next few days it will submit a business plan for immediate and direct investments of $6 billion. I can’t think of a better Independence Day [6 May] gift.”

Anonymous government sources report the upgrade will generate between 800 and 1,000 new jobs, Bennett adding that Intel is committed to staying in Israel until at least 2030.

“This is a vote of confidence in the Israeli economy. Investment like this will create thousands of workplaces directly and tends of thousands indirectly all for the Israeli middle class,” finance minister Yair Lapid added.

To help sweeten the deal for Intel the government is offering a grant that is expected to equal five per cent of the amount the semiconductor firm is putting forward meaning that the aid will amount to as much as $300 million [£177 million].

The latest news all but confirms that Intel is taking the lesser of the two options rumoured back in January that included spending $10 billion [£6 billion] on a new plant or around $5 billion [£3 billion] on the existing Kiryat Gat production line.

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Intel already employs around 9,855 people around the country with research and development facilities in Haifa, Petah Tikva, Jerusalem and Kibbutz Yakum. In addition to the R&D centres it also has manufacturing plants in Kiryat Gat and Jerusalem. It is one of the largest contributors to the Israeli economy and in 2012 showed exports that totalled $4.6 billion [£2.7 billion] thus accounting for 10 per cent of the country's total industrial exports.