Intel will invest $25 billion in the Israel factory in record deals, says Netanyahu

JERUSALEM, June 18 (Reuters) – U.S. chip maker Intel Corp ( INTC.O ) will spend $25 billion on a new factory in Israel, Prime Minister Benjamin Netanyahu said on Sunday, calling it the biggest ever international investment in the country.

The factory in Kiryat Gat is due to open in 2027, be operational by at least 2035 and employ thousands of people, Israel̵[ads1]7;s Finance Ministry said. Under the agreement, Intel will pay a tax rate of 7.5%, up from the current 5%, the ministry added.

During its nearly five decades of operations in Israel, Intel has grown to become the country’s largest privately owned employer and exporter and a leader of the local electronics and information industry, according to the company’s website.

In 2017, Intel bought Israel-based Mobileye Global Inc ( MBLY.O ), which develops and distributes advanced driver assistance systems, for $15 billion. Intel announced Mobileye last year.

Netanyahu announced the deal in TV commercials for his cabinet, calling it “a huge achievement for the Israeli economy – 90 billion shekels ($25 billion) – the largest investment ever by an international company in Israel”.

In a statement, Intel said its Israel operations had “played a critical role” in the company’s global success.

“Our intention to expand production capacity in Israel is driven by our commitment to meet future production needs … and we appreciate the continued support of the Israeli government,” it said.

Written by Dan Williams and Ari Rabinovitch; editing by James Mackenzie

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