Intel's $5 Billion Plant Expansion Plan Is Subsidized By Israel By Nearly $200 Million

As early as May this year, Intel announced plans to expand its factories in Israel and submitted applications. Today, the Israeli government agreed to give 700 million shekels of government subsidies to Intel's proposed $5 billion plant expansion program.

Intel is one of Israel's largest employers and exporters, and many of its new technologies are developed in Israel. Meanwhile, Intel is also the largest investor in technology, with an investment of about $35 billion.

In order to attract Intel to continue its investment, the Israeli government will give it a series of preferential policies, including government allocation of 20-30% of the total investment, reduction of corporate tax, land acquisition exemption from bidding, and development cost subsidies.

It is reported that Intel plans to invest $5 billion in Israel from 2018 to 2020, and Intel plans to invest $5 billion to expand the capacity of Buffalo Chip Factory in southern Israel. The expansion of Buffalo City will start this year and be completed by 2020. Intel has previously said it plans to upgrade its manufacturing process from 22 nanometers to 10 nanometers to produce smaller and faster chips.

In 2014, Intel invested $6 billion to upgrade its Buffalo factory, 5% of which was subsidized by the Israeli government, and received a 10-year corporate tax credit of 5%. Intel invested $6 billion in the expansion and upgrading of the plant from 2016 to 2017.

For Intel, Israel is one of the most important locations. At its peak, Intel had three Fabs in Israel. The earliest Fab 8 was in Jerusalem. In 2007, the expansion plan was abandoned because the local orthodox Jews continued to oppose its production on the Sabbath and eventually shut down because of the aging of equipment. Two Fab factories were located in Buffalo City, Israel. These two Fabs made Buffalo City, which had only thousands of people and a textile factory, a high-tech city with a population of 50,000 and smoked at the same time. Hewlett-Packard and other multinational companies were introduced.

Intel has four R&D centers in Haifa, Yakum, Jerusalem and Petatikwa, with more than 10,000 direct employees, in addition to the two existing Fabs. It is worth mentioning that the Haifa Research Center is Intel's largest research and development center outside the United States.