Intel is about to give its Israeli production facilities a significant boost, the company confirmed on Tuesday.
According to a Reuters (opens in new tab) report, the US chipmaker is looking at a $5 billion investment.
The money will mostly go into the upgrade of the Kiryat Gat manufacturing facility in southern Israel, with some funds also going to local suppliers.
According to the country’s Ministry of Finance, 18 billion shekels ($5bn) will be invested into the factory until 2020.
“According to company officials, this investment is expected to pave the way for a future significant investment for a technological upgrade at the Israeli site,” the ministry said in a statement.
Intel currently enjoys a reduced tax rate of five per cent, and the side-effect of this new investment is the extension of the tax rate until 2027. There have also been talks of a 700 million shekel grant.
“This is to incentivize the company to carry out the future investment that could be significantly higher than past and current investments,” the ministry said.
Israel is an important part of Intel’s business, with roughly $3.6 billion worth of goods and services being exported from the country last year. That amounts to eight per cent of the country’s total high-tech exports, Reuters says.
Image Credit: Michael Moore