Israel’s Finance Minister Moshe Kahlon announced Monday night that Intel, an American multinational corporation and technology company, will invest $10.9 billion in the company’s Israeli operations, making this one of the largest infusions of foreign money into the Israeli economy. It is estimated that when this plan is realized, the company’s investment in its Israeli operations since it was founded in 1974 will reach $50 billion.
In conjunction with the announcement of their future investment in Israel, Intel released a statement saying that its exports from Israel in 2018 totaled $3.9 billion, an increase of $300 million from 2017, in addition to local procurement of materials and services – primarily in the periphery – worth $1.7 billion.
To facilitate this further investment, the Israeli government is expected to give Intelt a grant of $190 million. The company already pays a reduced 5% tax rate, which it would not seek to change under the arrangement, according to the report.
Intel currently employs 11,700 workers in its Israeli operations. An additional 1,100 work at its Jerusalem-based Mobileye subsidiary which it acquired in 2017 for $15.3 billion. The purchase of Mobileye was the largest sale of an Israeli company to date.
Last month, the Knesset’s Finance Committee announced it would give Intel a $190 million grant in return for investing an additional $5 billion in its existing Kiryat Gat fabrication plant, and hiring an expected 250 new employees and purchasing domestic products worth $570 million.
Intel facilities in Ra’anana are currently working on high-speed WiFi connectivity, GPS, and 5G mobile communications with WiGig technology. There is also an artificial intelligence (AI) center in Haifa developing an AI chip for servers in conjunction with Facebook. Intel also has Research and Development centers in Jerusalem and Petach Tikva.
According to Globes, negotiations are still in an early stage and the final figures could be lower. In December, announced plans to expand current operations in three locations: Oregon, Ireland, Israel but it is still unclear if this will happen, and if so, in which locations.
Intel is in the process of transitioning from being a producer of silicon computer chips to a data-centric company, with activities ranging from the manufacturing of chips to developing safety features in vehicles, wireless phone connections, drones, and cloud-based technologies.
Source: Israel in the News