THE MINISTRIES OF ECONOMY AND FINANCE APPROVE A $6 BILLION INVESTMENT
PROJECT AND AWARD A $300 MILLION GOVERNMENT GRANT FOR INTEL CORP TO UPGRADE
ITS KIRYAT GAT PLANT WITH THE WORLD’S MOST ADVANCED TECHNOLOGY FOR
MICROELECTRONIC COMPONENT PRODUCTION.

THE GRANT, AUTHORIZED TODAY BY THE MINISTRY OF ECONOMY’S INVESTMENT CENTER,
WILL BE SPREAD OVER 5 YEARS AND GENERATE EMPLOYMENT FOR THOUSANDS OF PEOPLE
IN THE COMING YEARS.

Minister of the Economy, Naftali Bennett: “Approving Intel's arrival in
Israel with the greatest investment in the history of the state is a
historic occasion for all its citizens, but particularly for the residents
in the south of Israel, where hundreds will be employed at the new plant.”

Jerusalem, September 22, 2014 - This morning, the Ministries of Economy and
Finance approved Intel’s investment program, during a meeting of the
Ministry of Economy Investment Center administration, headed by Nahum
Itzkowitz. The company’s investment in upgrading the Kiryat Gat plant will
be around $6 billion, in line with the business plan submitted to the
Investment Center.

The members of the Investment Center administration include, in addition to
representatives from the Ministry of Economy, representatives from the
Ministry of Finance, the Israel Tax Authority, Ministry of Agriculture, the
Manufacturers Association of Israel, and representatives of the general
public.

As part of the program, Intel will employ another 1,000 workers, in line
with its business plan. An additional 2,500 employees will be indirectly
employed as a result of the plant upgrading. In addition, the company is
committed to a reciprocal purchase in Israel of an aggregate total of around
$550 million, and additional local purchases of around NIS 180 million
annually. Likewise, the company committed to employing most of its workforce
from southern Israel.

As part of the approval, Intel Corp – which will turn its Kiryat Gat plant
into the most advanced plant in the world for microchip technology – will be
given special preferred enterprise status, as approved by the Ministry of
Finance Director General Yael Andorn, Ministry of Economy Director General
Amit Lang, and Israel Tax Authority Director General Moshe Asher. The
special preferred enterprise status will be decreed according to the Law to
Encourage Capital Investment,, after it was proven that the plant will
contribute fundamentally to Israel’s economic activity and produce a high
yield for the economy, and has the ability to advance national targets for
Israel’s economy.

This status will grant Intel eligibility for 5% corporate tax over a period
of 10 years (until 2023), and grants of $300 million to be spread over 5
years. For the first time, the State has determined clear criteria which
will be constantly reviewed throughout the eligibility period:

1. Increasing the export capacity relative to the previous eligibility
period, in addition to revenue targets.
2. Eliminating the possibility of reducing employment targets if
investment rates decline.
3. Increasing local purchasing demands, so that it is assured that
there will be an increase of at least 10% relative to 2013 and a $100
million increase in reciprocal purchase.
4. The number of workers who will move to the periphery was increased
to 50% of all employees (relative to 50% of the incremental workers).
5. Adding an investment in academic research institutions alongside
financing tuition fees for students, and defining a minimum sum of $1
million annually.
6. A commitment that Israeli workers and suppliers will implement the
required set-up activities
7. Preventing workers in the group being moved to beneficiary companies
to meet employment targets.

Minister of the Economy, Naftali Bennett: “Approving Intel’s arrival in
Israel with the greatest investment in the history of the state is a
historic occasion for all its citizens, but particularly for the residents
in the south of Israel, where hundreds will be employed at the new plant. An
investment of $6 billion, jobs for thousands of Israelis, and future income
of millions of dollars from taxation makes is indeed tremendous news for the
Israeli economy which is beginning the new year with a giant step forward
and positioning Israel as an attractive investment destination by
international criteria.”

Minister of Finance, Yair Lapid: “Intel’s investment is a strategic asset
for Israeli industry. This is the largest investment ever made by a foreign
company in Israel, and is additional proof that Israel is at the forefront
of the technology industry and innovation. The factory’s upgrade will lead
to the creation of around 1,000 new jobs which will provide work for
residents of southern Israel. We will continue to work to create an
attractive business environment so as to increase investment in the State of
Israel.”

Ministry of Finance Director General, Yael Andorn: “Approval of the
investment program and grant concludes work conducted jointly by the
Ministry of Finance, Ministry of Economy, and the Israel Tax Authority, in
which we succeeded in creating the conditions for awarding a grant and tax
benefits. The conditions ensure meeting measureable targets in the fields of
employment, local purchasing, and increasing production in a manner which
will contribute to growth in the economy.”

Ministry of Economy Director General, Amit Lang: “Intel’s investment, the
largest ever in the history of the State of Israel, brings with it real
tidings for strengthening Israeli industry, Israel’s economic development,
and, in particular, for reinforcing and increasing employment rates in
southern Israel. We need to remember that this investment carries many and
broader influences on the Israeli economy, such as the reciprocal purchase,
research and development, training skilled manpower, etc.”

Nahum Itzkowitz, Director of the Investment Center at the Ministry of
Economy, noted that this is the largest investment ever made in Israel by a
foreign company. All aspects of the investment were examined by
professionals, and it was proven that it will bring many high-quality
benefits to the State of Israel, first and foremost an increase in
employment with high productivity, increased employment and direct and
indirect economic activity, influence on research and development for many
companies, expanding the activity of suppliers and service providers in
Israel, various tax and dividend receipts, improving and training a
professional high-quality workforce, etc. Of no less importance, added
Itzkowitz, “Intel’s decision to continue investing in Israel has strategic
importance and serves as a fundamental and significant contribution to
Israel’s image as a leading country in technological innovation, and serves
as an attractive focal point for investors and companies in Israel and
around the world. Today is a day of celebration for the growth and
empowering of Israel’s economy."