Incentives constitute 12.8% of the American company's planned investments in Tel Aviv
Intel confirmed that it will invest $25 billion in Israel after receiving incentives worth $3.2 billion from the country's government.
Intel has not yet confirmed the funding, which was announced by the Israeli government in June, and will go towards expanding the company's chip manufacturing plant in Kiryat Gat, south of Tel Aviv. Incentives make up 12.8% of Intel's planned investments.
Intel said in a statement on Tuesday that the expansion plan for the Kiryat Gat site is an important part of the company's efforts to foster a more resilient global supply chain, alongside the company's ongoing and planned investments in manufacturing in Europe and the United States.
Diversify manufacturing outside Asia
Intel is among the chipmakers diversifying manufacturing outside of Asia, which dominates chip production. The leading company in the field of semiconductors is trying to regain its technological strength after its competitors, such as NVIDIA and Taiwan Semiconductor Manufacturing Company, surpassed it.
Intel is turning to Israel amid a wave of chip companies expanding beyond East Asia
The Israeli government has asked Intel to begin operations at the plant by 2028 and continue until at least 2035. Intel also committed to spending NIS 60 billion ($16.6 billion) with Israeli suppliers over the next decade, creating thousands of direct and indirect jobs. The company currently employs 11,700 people in Israel. Construction work is currently underway to enhance the company's location.
The Israeli Ministry of Finance reported that this investment is the largest made by any company in the country. She explained in a statement that the timing of this investment, which comes in light of intense global competition for investment in the chip field, is an important vote of confidence in Israel’s economy.