US-based semiconductor manufacturing major Intel is going to invest $25bn to build a new factory in Israel, reported Reuters, citing Israeli Prime Minister Benjamin Netanyahu.

According to Israeli Finance Ministry, the new factory is expected to open in 2027 and operate at least until 2035.

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The facility will be in Kiryat Gat and is expected to generate thousands of employment opportunities.

In televised remarks to his cabinet, Netanyahu described the agreement as “a tremendous achievement for the Israeli economy – NIS90bn ($25bn) – the largest investment ever by an international company in Israel.”

According to the agreement, Intel will pay a tax rate of 7.5% rather than the current 5%, the ministry noted.

In a statement, Intel said that the company’s activities in Israel had “played a crucial role” in its success on a global scale.

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“Our intention to expand manufacturing capacity in Israel is driven by our commitment to meeting future manufacturing needs … and we appreciate the continued support of the Israeli government,” it added.

Separately, the chipmaker announced that it will invest $4.6bn to set up a semiconductor assembly and test facility near Wrocław, Poland.

Together with its current wafer fabrication facility in Leixlip, Ireland, and its upcoming wafer fabrication facility in Magdeburg, Germany, Intel’s planned investment in Poland will help build a first-of-its-kind end-to-end semiconductor manufacturing value chain in Europe, the company noted.

Last week, it was reported that Intel is close to receiving nearly $11bn in government aid for its proposed German facility.