(photo credit:Intel Israel)
The government is offering Intel Corporation NIS 1 billion as an inducement for
further investment in operations in Israel, the Industry, Trade and Labor
Ministry announced Tuesday.
Finance Minister Yuval Steinitz and Industry,
Trade and Labor Minister Shalom Simhon decided Tuesday to approve in principle
the NIS 1b. grant to the semiconductor giant for expanding its plant in Kiryat
Gat and constructing a new assembly plant in the North. The total investment in
these facilities will be more than NIS 5b., the Industry, Trade and Labor
RELATED:Intel to spend $810m. in Israel
As a condition of the grant, Intel will be required to
employ 1,500 additional workers in Kiryat Gat and 600 to 1,000 new workers in
Intel will also be entitled to tax breaks in accordance with
the Law for the Encouragement of Capital Investment. It will become the first
company to gain the status of a special preferred enterprise under the
amendments to the law.
Two months ago, Intel applied to the Industry,
Trade and Labor Ministry for a grant for the expansion of its existing fab in
Kiryat Gat, which would enable it to manufacture with its most advanced
technology. At the same time, the company announced it was considering setting
up an assembly plant in the North.
A joint committee of the Finance
Ministry and the Industry, Trade and Labor Ministry considered the request,
taking into account various considerations, including the creation of jobs,
promotion of technological innovation and boosting productivity.
first time, the team also examined the relationship between the tax benefits
that the plants would receive and the size of the grant to be awarded.
accordance with the team’s recommendations, the ministers have decided on a
three-stage budget: up to NIS 550 million for investment in Kiryat Gat; an
additional NIS 550m. for setting up a plant employing at least 600 workers in
the North; and an additional NIS 150m. for expanding the number of people
employed in the North by a further 400. The required period of employment is at
least 10 years. The grant will be paid to the company starting in 2014, in
accordance with progress in carrying out the investment.
requires the approval of the Industry, Trade and Labor Ministry’s Investment
“If Intel responds positively to the proposal, it’s
something big, because our offer on assembly of the company’s products in Beit
She’an competes with opportunities for it in China,” a senior government
official told Globes Tuesday.
“The ball is now in their court. We’ll be
very glad if they play it in the right direction.”
“Intel’s investment in
its plants in Israel indicates confidence in Israel’s economic strength,”
Steinitz said. “Construction of the plant in the North will represent a
strategic base in the area, will help expand employment there and help to
strengthen the periphery in general and the North in particular.”
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