US technology giant Intel Corp. will purchase over $4 billion of Israeli products and services over the next six years, the Economy Ministry announced Wednesday, just two days after the company agreed a record-breaking $11b. investment in its Israel-based operations.
The reciprocal purchase agreement signed by Intel and the ministry’s Industrial Cooperation Authority (ICA) is the result of conditions attached to a NIS 700 million ($190m.) grant announced by the government in December in return for a $5b. expansion of its Kiryat Gat operations.
On Monday, Finance Minister Moshe Kahlon announced that Intel would invest an “unprecedented” NIS 40b. (approx. $10.9b.) in the company’s Israel-based operations, significantly expanding its multibillion dollar presence in the country.
Intel is planning to use its largest investment in Israel to date to construct a vast production facility in the southern city of Kiryat Gat, creating an estimated 1,000 jobs.
Prime Minister Benjamin Netanyahu expressed his delight at the investment on Wednesday, as he welcomed Yaniv Garty, Intel vice president and Intel Israel general manager, to his office.
“I am proud that you are aware of the tremendous advantages offered by Israel, and I am proud that you are leading a truly extraordinary move from within the State of Israel,” said Netanyahu.
The company will receive a grant of about $1b. from the government for its investment plan, Kahlon said on Tuesday, and the ICA will enter into a further round of reciprocal purchase negotiations based on the latest grant.
“We will continue to insist that foreign companies fulfill their obligation for reciprocal purchases back from Israel industry,” Economy Minister Eli Cohen said.
Marking another possible investment in Israeli hi-tech, Intel has reportedly offered between $5.5b. and $6b. to acquire Israeli chipmaker Mellanox Technologies.