MK Reuven Rivlin: Intel and Jerusalem are symbols.
Intel Corporation (Nasdaq: INTC) is staying in Jerusalem. The company has reached an agreement with the Knesset Finance Subcommittee on Intel, the Israel Tax Authority, and the Investment Promotion Center to close the company's outdated Fab 8 in the city and replace it with a new line that will employ advanced technology and employ hundreds of people.
Intel will obtain $150 million in tax breaks over ten years. The tax break comes on top of the $525 million in grants from the Investment Promotion Center in exchange for the company's commitments to keep R&D and manufacturing in Israel. Intel undertook to employ at least 100 employees in manufacturing at the new fab.
Investment Promotion Center director Hezi Zaieg told the Finance Subcommittee that Intel would soon complete Fab 28 in Kiryat Gat, which will employ 2,200 people. More than NIS 4 billion has already been invested in this fab.
In late 2006, Intel announced that it would close Fab 8 because of the plunge in demand for its products in the global market, and that it would transfer the fab's 400 employees to the new Fab 28.
MK Reuven Rivlin (Likud), who initiated the Finance Committee meeting, was appointed chairman of the subcommittee that was charged with finding solutions to keep Intel's manufacturing activity in Jerusalem. Intel Israel general manager Alexander Kornhauser told the subcommittee that only an incentive big enough and competitive enough in the opinion of Intel's management in the US would persuade it to set up alternative manufacturing capacity in the city.
During the subcommittee's activity, Rivlin rejected every arrangement based on a grant from the Investment Promotion Center, because of its limited budget. He preferred incentives in the form of large tax breaks. Rivlin mediated feverish discussions were held in recent months between Intel and the Tax Authority to reach the arrangement that was submitted to the Finance Committee today.
At the end of the meeting, Rivlin said, "Intel is a symbol in the high-tech world, and Jerusalem is a symbol in Israel and the world. The connection between the two positions Jerusalem as a business and technology target and will attract more investment to the city as a place with high-quality development and manufacturing capabilities."
Published by Globes [online], Israel business news - www.globes-online.com - on February 18, 2008
© Copyright of Globes Publisher Itonut (1983) Ltd. 2008
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