Israel’s government agreed to give Intel a $3.2 billion grant for a new $25 billion chip plant it plans to build in southern Israel, both sides said on Tuesday, in what is the largest investment ever by a company in Israel.

The news comes as Israel remains locked in a war with Palestinian militant group Hamas in the wake of the Oct. 7 Hamas attack on Israel.

Shares of Intel, which has a bit less than 10% of its global workforce in Israel, opened up 2.73% at $49.28 on Nasdaq.

The expansion plan for its Kiryat Gat site where it has an existing chip plant that is 42 km (26 miles) from Hamas-controlled Gaza is an “important part of Intel’s efforts to foster a more resilient global supply chain, alongside the company’s ongoing and planned manufacturing investments in Europe and the United States,” Intel said in a statement.

Under CEO Pat Gelsinger, Intel has invested billions in building factories across three continents to restore its dominance in chip-making and better compete with rivals AMD , Nvidia and Samsung.

The new Israeli plant is the latest investment by the U.S. chipmaker in recent years.

“Support from the Israel government will … ensure that Israel remains a global center of semiconductor technology and talent,” Intel vice president Daniel Benatar said.

Intel had previously received around $2 billion in the past 50 years in Israeli grants in other facilities there.

Ofir Yosefi, deputy director general of Israel’s Investments Authority, said Intel chose a higher grant and tax rate over an offer for a lower grant and lower tax rate.

He said the process took months since a grant of such magnitude needed a review and independent analysis that it was economically viable. It was determined Israel would reap much higher fiscal and economic benefits, he added.

[b]“This investment, at a time when Israel wages war against utter wickedness, a war in which good must defeat evil, is an investment in the right and righteous values that spell progress for humanity,” Finance Minister Bezalel Smotrich said.

Intel, whose investm[/b]ent will be over five years, will pay a corporate tax rate of 7.5% instead of 5% previously. The normal tax rate is 23%, but under Israel’s law to encourage investment in development areas, companies receive large benefits.

In addition to the grant that amounts to 12.8% of the total investment, the chipmaker also committed to buy 60 billion shekels ($16.6 billion) worth of goods and services from Israeli suppliers over the next decade, while the new facility is expected to create several thousand jobs.

Intel, one of around 500 multinationals in Israel, established a presence there in 1974 and now operates four development and production sites, including its manufacturing plant in Kiryat Gat called Fab 28 that produces Intel 7 technology, or 10 nanometer chips, and employs nearly 12,000 people in the country while indirectly employing another 42,000 more.

At some $9 billion, Intel’s exports account for 5.5% of total high-tech exports. The Centrino chip, which enables the use of WiFi, and its Core processors were developed in Israel.

Intel, which bought Israeli self-driving auto technologies firm Mobileye for $15.3 billion in 2017, declined to say what technology will be produced at the new Fab 38 plant that Intel says construction is already begun.

In June, Prime Minister Benjamin Netanyahu said Intel would build a new $25 billion chip plant in Israel but Intel until now had declined to confirm the investment.

The Fab 38 plant is due to open in 2028.

https://moneycentral.com.ng/exclusive/article/intel-to-build-25bn-israel-chip-plant-in-largest-ever-investment/

If the Nigerian government can answer the question why Intel is investing $25bn in Israel despite the current war while it struggles to attract investments to Nigeria, it would have solved half the problem.

MCentral:
If the Nigerian government can answer the question why Intel is investing $25bn in Israel despite the current war while it struggles to attract investments to Nigeria, it would have solved half the problem.

It won't solve anything.
The reason is very obvious but the solution is complex.

Chip supremacy will determine military and defence supremacy in the coming decade as well as advanced gadgets market domination. TSMC is already putting around that amount per year into research and development. China and US too are there. The Europeans too aren't totally left out.

MCentral:
If the Nigerian government can answer the question why Intel is investing $25bn in Israel despite the current war while it struggles to attract investments to Nigeria, it would have solved half the problem.

In Israel, the politicians aren't sponsoring and shielding terrorists within. The terrorists are mostly from outside and they are honestly try to contain the threat they pose.
Nigeria is different. We shield them and have monitized terrorism with a blend of poverty and entitlement mindset.

Israel is half of the population of Lagos and smaller than oyo landmass but has GDP equivalent to Nigeria.

Nigeria is a failed state.

MCentral:
If the Nigerian government can answer the question why Intel is investing $25bn in Israel despite the current war while it struggles to attract investments to Nigeria, it would have solved half the problem.

Nigerians are too poor for any company to think of investing here

Government should just think of how to make your people richer... Once you do that investors would come


And you don't even need foreign investors you don't at allow

Empower your people to develop products and services you need

In power them to go outside make money and come back

ivolt:

It won't solve anything.
The reason is very obvious but the solution is complex.

Not quite true. Diagnosing a problem is halfway to solving that problem.

On why Intel choose Israel for its $25bn Chip plant i would guess a number of reasons:

1. Availability of High tech workforce
2. Superior education/University facilities, R & D
3. Market economy with freely trading currency
4. Already existing tech ecosystem
5. Rule of law

Nigeria will surely divide. The current structure is not working. BTW...if this investment was coming to Nigeria, it'd be sited in Lagos — because just a single city/state is business-friendly enough in a country of over 200m. And we wonder why a tiny Lagos has 20m people and the populace spend 50 hours on the road every day due to over population.

RepoMan007:
Chip supremacy will determine military and defence supremacy in the coming decade as well as advanced gadgets market domination. TSMC is already putting around that amount per year into research and development. China and US too are there. The Europeans too aren't totally left out.

Europe will still be in the lead atleast for the next ten years.
The company that manufactures the machine use in chip making is in europe, somewhere in netherlands.
Na them be the baba for chip making.

Armaggedon:
Israel is half of the population of Lagos and smaller than oyo landmass but has GDP equivalent to Nigeria.

Nigeria is a failed state.

LMAO! 🤣🤣