Intel Corp. is making a $25 billion investment in Israel, the country’s government said Tuesday, describing the move as “important and significant.”
The chip giant’s investment comes after Intel secured $3.2 billion in incentives from Israel, according to Bloomberg. The Times of Israel reports that Intel’s
INTC,
$25 billion investment will support a chip manufacturing plant in Kiryat Gat, which will employ thousands of workers, and is expected to start operations by 2028. The deal was agreed in principle in June, according to the Times of Israel.
Intel shares rose 2.4% in premarket trades Tuesday. The company’s stock is up 81.6% in 2023, outpacing the S&P 500 index’s
SPX
gain of 23.8%.
Related: ‘Magnificent Seven’ up for another bull run? What to expect from technology stocks in 2024.
“The choice of the global company Intel to approve the unprecedented investment of 25 billion dollars and to establish its new factory right here, in Israel, is important and significant,” said Israel’s Finance Minister Bezalel Smotrich, in a translated tweet on X, formerly known as Twitter. “Such an investment, while Israel is at war with absolute evil, a war in which good is obliged to defeat evil, is an investment in the correct and just values that promote humanity.”
“The choice of the global company Intel to invest in Israel, an unprecedented investment like this, is an expression of confidence in the State of Israel and the Israeli economy,” he added.
Kiryat Gat is located about 12 miles from the border with Gaza. “This investment will promote quality employment with high productivity in the peripheral settlements and will affect the growth of the Israeli economy,” tweeted Smotrich.
Related: Intel’s stock is on pace for its best quarter in 20 years
Intel is one of the largest employers in Israel’s high-tech industry, and has 11,700 employees in the country, according to the company’s website. The chip giant’s workforce in Israel includes 3,900 employees in manufacturing and 7,800 in development roles. Based on 2022 data, Intel’s Israeli operations account for $8.7 billion in exports, or 5.5% of the country’s high-tech exports and 1.75% of Israel’s GDP.
MarketWatch has reached out to Intel with a request for comment on this story.
Israel has vowed to crush Hamas after the Oct. 7 attack in which militants killed approximately 1,200 people, mostly civilians, and took over 240 others hostage. Citing health officials in Gaza, the Associated Press reports that Israel’s war to destroy Hamas has killed more than 20,000 Palestinians.
