Intel is making the biggest foreign investment ever in Israel with the building of a chip manufacturing plant, Prime Minister Benjamin Netanyahu announced on Sunday.

The U.S. semiconductor company will spend $25 billion on a third Israeli factory in Kiryat Gat in the south of the country that is scheduled to open in 2027, according to the Finance Ministry.

Under the deal, Intel will pay a 7.5% tax rate, up from 5%, the Finance Ministry added.

“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 prime minister said at the start of the weekly Cabinet meeting.

According to Intel Israel’s Corporate Responsibility Report published earlier this month, the company posted record exports of $8.7 billion in 2022, accounting for 1.75% of Israel’s GDP and 5.5% of Israeli high-tech exports.

The company employs around 10,000 people in Israel directly and another 30,000 indirectly. The chip-making giant has one plant already in operation in Kiryat Gat and is currently constructing another plant there at an investment of $10 billion.

In a statement, Intel said that its Israel operations “played a crucial role” in its global success.

“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,” the company said.