Intel‘s investment secures the company's future

The news is significant for Israel's economy, with Prime Minister Benjamin Netanyahu proudly calling it the largest international investment in the country's history.

The new 90 billion shekel plant will be located in Kiryat Gat. It is scheduled to begin operations in 2027 and run until at least 2035. Intel has agreed to a 7.5% tax rate, a slight increase from the current rate 5%. Intel is Israel's largest private sector employer and exporter. In 2015, it bought Mobileye, an Israeli technology company that develops only driver assistance systems, for $15 billion. Intel highlighted the key role of Israeli operations in the company's global success and expressed gratitude for the Israeli government's support.

Evolution of the shares‘ market value

The value of the company's stock has been defined by rather red numbers over the past five years. However, looking at the value development since Intel's IPO, they are in the green numbers and have gained more than 34 percent since the beginning of this year.* As one of the most influential technology companies in the world, Intel has managed to jump on the trend of excessive interest in chips in a somewhat weaker style than rival NVIDIA, but that doesn't mean it's too late. Significant investment in a new plant has boosted investor sentiment and the stock has seen rapid growth, which is good news for the company's future [1].

Intel's stock performance over the past five years. (Source: Google) *

The next plant will be in Poland

In addition to the Israeli investment, Intel has announced plans for plant expansion in Poland, near Warsaw. The estimated $4.6 billion price tag will focus on semiconductor assembly and testing. It will join a list of complexes in Germany, France and Ireland, taking advantage of the European Commission's relaxed subsidy and funding arrangements. The plant will bring about 2 thousand new jobs and Poland has expressed particular enthusiasm for the company's decision. Polish Prime Minister Mateusz Morawiecki described Intel's factory as "the largest greenfield investment in Poland's history". The plant is expected to be operational in 2027. With this strategy, Intel, led by its CEO Pat Gelsinger, would like to expand its presence on three continents, and ensure its competitiveness against AMD, NVIDIA and Samsung and, most importantly, restore its dominance in the chip sector.

Olivia Lacenova, principal analyst at Wonderinterest Trading Ltd.

* Past performance is no guarantee of future results

[1] Forward-looking statements are based on assumptions and current expectations, which may be inaccurate, or on the current economic environment, which may change. Such statements are not guarantees of future performance. They involve risks and other uncertainties that are difficult to predict. Results may differ materially from those expressed or implied by any forward-looking statements.