Intel Signs Agreement to Invest $25 Billion in New Chip Factory in Israel
Intel, the US semiconductor group, has agreed “in principle” to invest approximately $25 billion in a new chip factory in Israel, according to Prime Minister Benjamin Netanyahu. This significant investment is part of Intel’s plan to upgrade its manufacturing facilities in Israel, where the company has been operating since 1974. While specific details of the project have not been confirmed by Intel, the company emphasized that the expansion is driven by their commitment to meet future manufacturing needs and expressed appreciation for the support of the Israeli government.
Investment Amid Global Chip Market Tensions
Intel’s decision to upgrade its chip manufacturing capacity in Israel is part of a series of chip plant investments planned by the company. The move comes at a time of increased tensions between the United States and China over Taiwan, which dominates the global market for high-end chips. These tensions have prompted chipmakers to reassess their operations worldwide.
Additionally, Intel is currently in talks with Germany about a €20 billion plant in Magdeburg and has announced plans to build a $4.6 billion semiconductor assembly and testing plant in Poland. Discussions for a plant in Italy are also underway. These investments highlight Intel’s commitment to expanding its global manufacturing capabilities and securing its position in the competitive chip market.
Significance for Israel’s Economy
Netanyahu described the new chip factory in Kiryat Gat as “the largest investment ever” in Israel. This investment brings not only financial benefits but also opportunities for employment. Israel’s finance ministry expects the project to employ thousands of new workers, providing a boost to the country’s economy.
Moreover, the investment by Intel demonstrates confidence in the Israeli economy. Despite controversies surrounding Netanyahu’s far-right government, such as plans to overhaul the judiciary, the prime minister has consistently downplayed concerns about the economic impact of these reforms. He sees Intel’s planned investment as a testament to the strength of the Israeli economy and its development in the technological sector, where the country has made significant advancements.
However, recent events have raised concerns about the Israeli economy. The struggle over the judiciary overhaul has caused internal shock, according to the head of the country’s central bank. Additionally, the Israel Innovation Authority warned of a significant increase in the number of Israeli startups registering abroad rather than in Israel. These challenges highlight the importance of attracting and retaining investments, such as Intel’s, to maintain economic growth and stability in the country.
Summary
Intel has agreed “in principle” to invest approximately $25 billion in a new chip factory in Israel. The US semiconductor group plans to upgrade its manufacturing facilities in the country. This investment is part of a series of chip plant investments by Intel as tensions between the US and China over Taiwan prompt chipmakers to reevaluate their operations worldwide.
The new chip factory in Kiryat Gat will be the largest investment ever in Israel, according to Prime Minister Benjamin Netanyahu. This investment is seen as a vote of confidence in the Israeli economy. However, recent controversies and challenges, such as plans to overhaul the judiciary and an increase in Israeli startups registering abroad, have raised concerns about the country’s economic stability.
Intel’s investment is expected to bring economic benefits and create thousands of new jobs in Israel. The expansion of the technological sector and the country’s free economy are recognized as key factors in attracting such investments.
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Intel has agreed “in principle” to invest about $25 billion in a new chip factory in Israel, Prime Minister Benjamin Netanyahu said on Sunday.
The US semiconductor group said it had “unveiled a business plan to upgrade its manufacturing facilities in Israel,” where it has operated since 1974, but declined to confirm “specific details of the project.”
“Our intention to expand manufacturing capacity in Israel is driven by our commitment to meet future manufacturing needs. . . and we appreciate the continued support of the Israeli government,” intel said in a statement.
The upgrade is one in a series of chip plant investments planned by Intel and comes as tensions between the US and China over Taiwan, which dominates the global market for high-end chips, have prompted chipmakers to reevaluate their their operations around the world.
Intel is in talks with Germany on a €20 billion plant in Magdeburg, and said last week it would build a $4.6 billion semiconductor assembly and testing plant in Poland. It is also under discussion for a plant in Italy.
Netanyahu said the new Kiryat Gat factory, where Intel already has a facility, would be “the largest investment ever” in Israel.
Ever since Netanyahu’s far-right government has proved controversial plans to overhaul the judiciary Earlier this year, hundreds of thousands of Israelis took part in weekly protests, with leaders of the country’s burgeoning tech sector among most critics turned on of the proposals.
The head of the country’s central bank warned last month that the struggle over the overhaul had delivered a “significant internal shock” to the Israeli economy. Meanwhile, the Israel Innovation Authority warned in May that there had been a “significant increase” in the number of Israeli startups registering abroad rather than in Israel.
Netanyahu has consistently downplayed fears about the economic impact of the judicial review and said on Sunday that Intel’s planned investment was “an expression of great confidence in the Israeli economy.”
“[It] it exactly reflects the strength of the free economy we have built here and the technological economy we are developing,” he said.
Israel’s finance ministry said the project is expected to employ thousands of new workers. He added that as part of the deal, Intel will pay a local tax rate of 7.5%, up from the current 5%.
https://www.ft.com/content/42a032e8-a40d-46f7-b969-f0be200eceef
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