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Chipzilla promises $6 billion to upgrade Israeli plant

Kiryat Gat to host 10 nm fab

Israel is to sling Intel a handy US$300 million and a ten-year tax break to persuade Chipzilla to stroll out of the Mediterranean and upgrade a chip plant in the country.

Intel says it's spending US$6 billion to upgrade the fab, and according to Reuters it will be hiring an additional 1,000 staff in its Kiryat Gat facility, in addition to its current 2,500 personnel.

The company's also getting a decent tax holiday as part of the arrangement: for the next decade it will pay a corporate tax rate of 5 per cent.

The Times of Israel reckons Intel's spend will be the biggest investment the country has ever attracted from a technology firm.

The facility will be set to work producing 10 nm chips, according to the Times of Israel, which claims the country beat out Ireland to win the fab.

The US$300 million grant will be spread over five years, some of which will get cycled back into the local economy by way of local purchasing commitments worth NIS 400 million, or more than US$100 million. Intel also had to promise that its local purchases would rise by 10 per cent annually, to give local contractors preference in working on the upgrade, and to sling US$1 million in the direction of university scholarships, along with expanding its academic research projects.

The US$6 billion commitment is less than the US$10 billion Chipzilla was reportedly budgeting for the project when discussions first hit the press in 2013. ®

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