Photo Credit: Abir Sultan/flash 90
The Jerusalem compound of computer chip manufacturer Intel.

Technology giant Intel, headquartered in Santa Clara, California, plans to invest $11 billion in setting up a new plant in Kiryat Gat, a city in southern Israel, some It lies 35 miles south of Tel Aviv, Globes reported on Monday. According to Globes, Intel is asking the state for a grant of 10% for its investment.

If the plan is realized, it would be the largest investment ever made by the giant chipmaker in Israel. Also, should the company receive its desired construction grant, it could reach $1.09 billion, also an all-time record.

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Discussions between Intel and the Finance Ministry about the investment began several weeks ago, led by the Finance Ministry’s director-general Shai Babad. At the start of negotiations, it was expected that it would be concluded within a short period of time, but the talks were still underway – this despite the fact that outgoing Finance Minister Moshe Kahlon, whose Kulanu party is facing extinction in the poles, could certainly use the deal in his win column.

To be fair, Kahlon has recused himself from the negotiations and has handed over the reins to Shai Babad. Meanwhile, the Economy Ministry, which in the past was deeply involved in contact talks with Intel, has so far not been included in the negotiations.

Intel’s management has been playing coy about the deal, according to Globes, claiming the deal is still open and the plant could be based in Ireland, the US or Israel.

According to Globes, the Chief Economist of the Finance Ministry has issued a report saying Intel’s investment conditions meet the economic parameters for assistance from the state, primarily the expected return on investment (ROI).

However, it is not yet clear how the deal would impact Israel’s dependence on the US economy, which has been exceptionally volatile in 2018.

Globes pointed to the fact that Bank of Israel Governor Prof. Amir Yaron said in a speech about his recent interest rate increase that Israel’s 2019 investment picture may improve “following an investment in a chip processing plant.”

Babad also hinted recently that a global company is expected to announce a dramatic investment in Israel soon, which would impact the country’s Gross Domestic Product (GDP), which in 2017 stood at $350.9 billion. Israel is 34th on the list of 211 world countries according to their GDP.

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David writes news at JewishPress.com.