Intel Corporation (NASDAQ:INTC) recently announced that it has submitted its expansion plans to the Ministry of Economy and Industry in Israel. The U.S chipmaker is planning to expand Kiryat Gat, its manufacturing plant located in Southern Israel and make technology installations. According to the Israeli government, the American company is most likely to invest around 18 billion shekels ($5billion) in between 2018 & 2020 and will spend 3 billion shekels on local suppliers.
The expansion plan was submitted by the company’s general manager for Israel, Yaniv Garty. It was devised in the last few months in collaboration with the teams of the Ministry of Finance and Ministry of Economy and Industry of Israel and Intel Israel.
Intel Eyeing Grants And Benefits From Israel’s Investment Center
The company is yet to come out with its timetable for making the investment, neither it has directly hinted about a particular investment figure or the type of technology it is planning to install at the Kiryat Gat. The US chip giant company is expected to ask for some grants and benefits from the Israel Investment Promotion Center under the Law for the Encouragement of Capital Investments.
And most probably, the company will be granted the benefits as it is one of the biggest employers and exporters of the country. According to Intel, it exported goods and services of $3.6 billion from Israel last year. It amounts to 8% of the total hi-tech exports of the country.
As per speculations, Intel will get an extension of its reduced tax rate of 5% until 2027 and most probably the Finance Ministry will also give the company a grant of 700 million shekels with a possibility of another grant of equal amount in the near future.
Ministry Expects Intel To Bring Higher Investments In Future
The ministry in its statement has said that this investment from Intel will lead to a future significant investment for a technological update at the company’s site in the country. According to the ministry, the benefits and grants are a way to incentivize the company so that it is encouraged to carry out more investments in the future that could be much higher than the past and even the current investments.