Israel’s Finance Minister revealed the figure on Twitter
Israel’s Finance Minister Moshe Kahlon has confirmed a 40 billion shekel (£8.2 billion) investment by Intel in a new semiconductor foundry in the country.
The investment comes as Intel has faced production bottlenecks, with CEO Bob Swan admitting in a Q4 conference call that the company had “some constraints on the ecosystem and on our customers during the course of the quarter.”
Kahlon broke the news on Twitter, writing: “Intel’s global management has informed us about its decision to invest another 40 billion shekels in Israel, an unprecedented decision that is expected to bring thousands of jobs to the south (of Israel).”
The deal had been a year in the making, he said in a separate tweet.
שנה אנחנו עובדים על זה והנה התוצאות:
הנהלת אינטל העולמית בישרה לנו הערב על החלטתה להשקיע בישראל עוד 40 מיליארד ש"ח, החלטה חסרת תקדים שצפויה להביא אלפי מקומות עבודה לדרום.
זו בשורה ענקית לכל מי שאכפת לו ממדינת ישראל, כלכלת ישראל ואזרחי ישראל.
וכפי שאתם כבר יודעים, לנו אכפת.
— משה כחלון – Moshe Kahlon (@KahlonMoshe) January 28, 2019
The news follows a commitment by Intel in May last year to invest about 18 billion shekels to upgrade its existing factory in the southern city of Kiryat Gat by 2020. The site is also expected to be home to the new foundry.
It comes after Intel’s XX Navin Shenoy, executive vice president and general manager of Intel’s Data Center Group, described the appetite for compute as “somewhat insatiable” on a conference call with analysts.
He said: “Bob [CEO Bob Swan] talked about compute cycle growth. Our five-year forecast for compute cycle growth or MIPS growth is 50% CAGR over the next five years. And I see nothing slowing that down over the next number of years.”
Intel late December announced that it was in the early planning phase for manufacturing site expansions in Oregon, Ireland and Israel, with multi-year construction activities expected to begin in 2019.
Dr Ann Keleher, GM of Manufacturing and Operations at Intel Corporation said at the time: “Having additional fab space at-the-ready will help us respond more quickly to upticks in the market and enables us to reduce our time to increased supply by up to roughly 60 percent”
Santa Clara-based Intel is one of the biggest employers and exporters in Israel and exported $3.9 billion from the country in 2018.