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Intel to invest ‘unprecedented’ $25 billion in chip manufacturing plant in Israel

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US semiconductor giant Intel Corp. has inked an agreement in principle with the Israeli government to build a chip manufacturing plant in Kiryat Gat at an investment of $25 billion.

Prime Minister Benjamin Netanyahu said the Intel investment was “unprecedented” in Israel and would go toward building a chip manufacturing plant that will use the most advanced technology in the world. In 2019, Intel already held talks for an investment of around $10 billion into building the Kiryat Gat chip plant.

“This is the largest investment ever in the State of Israel,” Netanyahu said at the weekly cabinet meeting on Sunday. “This is an expression of great confidence in the Israeli economy and exactly reflects the strength of the free economy that we have built here, and the technological economy that we are developing here.”

The announcement was made after an agreement in principle was reached between Intel and the Finance Ministry on the investment plans. As part of the agreement, Intel will pay a 7.5% tax rate, up from the 5% the chipmaker pays the state today, the Finance Ministry said in a statement. In addition, it was agreed that Intel would get a government grant at a rate of 12.8% of the investment amount under the Encouragement of Capital Investment Law (ECIL).

The Kiryat Gat factory is expected to open by 2027 and remain in operation until at least 2035, employing thousands of workers at higher-than-average wages, the ministry said.

“Intel’s investment will yield significant economic benefits to the State of Israel in general and to the southern region in particular,” said Budget Commissioner Yogev Gardos. “The negotiations with the company were… based on economic models to examine the benefits of the investment, in order to maximize value for the Israeli public while promoting investment in Israel against the alternative options available to Intel globally.”

Intel core processor Intel vPro. (Courtesy)

Since entering Israel in 1974, Intel has invested more than $17 billion in Israel and employs 11,700 employees at its three R&D centers — in Haifa, Petah Tikva and Jerusalem — as well as at its manufacturing plant in Kiryat Gat. Intel says it is currently responsible for creating indirect employments positions for approximately 42,000 workers in Israel.

“Israel is a global center of technical talent and innovation and one of Intel’s significant global manufacturing and R&D centers,” Intel said in a statement. “Our intention to expand manufacturing capacity in Israel is driven by our commitment to meeting future manufacturing needs and supporting Intel’s IDM 2.0 strategy, and we appreciate the continued support of the Israeli government.”

Last year, Intel acquired Israeli computing tech startup Granulate for a reported $650 million, marking the chipmaker’s seventh purchase of an Israeli company in just over five years.

The tech giant bought Mobileye, a Jerusalem-based maker of self-driving technologies, in 2017 for over $15 billion, a transaction that remains an Israeli company’s biggest exit to date. Mobileye has become a central part of Intel’s global operations as it looks to a future with fully autonomous vehicles.

Last week, Intel disclosed that Intel Israel in 2022 posted record exports of $8.7 billion, constituting 1.75% of Israel’s entire GDP and 5.5% of all Israeli high-tech exports, according to the firm’s corporate responsibility report. Furthermore, Intel Israel purchased $3.5 billion in goods and services from Israeli businesses, up 60% from the $2.2 billion recorded in 2021.

 

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Tesla shares soar more than 14% as Trump win is seen boosting Elon Musk’s electric vehicle company

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NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.

Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.

“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”

Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.

Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.

Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.

Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.

In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.

The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.

And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.

Tesla began selling the software, which is called “Full Self-Driving,” nine years ago. But there are doubts about its reliability.

The stock is now showing a 16.1% gain for the year after rising the past two days.

The Canadian Press. All rights reserved.

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S&P/TSX composite up more than 100 points, U.S. stock markets mixed

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TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.

The S&P/TSX composite index was up 103.40 points at 24,542.48.

In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.

The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.

The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.

The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.

This report by The Canadian Press was first published Oct. 16, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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S&P/TSX up more than 200 points, U.S. markets also higher

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TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.

The S&P/TSX composite index was up 205.86 points at 24,508.12.

In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.

The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.

The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.

The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.

This report by The Canadian Press was first published Oct. 11, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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