Israel’s Finance Ministry has given the go-ahead to a $6 billion upgrade of Intel’s chip fabrication plant in the south of the country, for which Israel will grant the U.S. firm $300 million over five years and give it an extra-low corporate tax rate for the next decade.

As Finance Minister Yair Lapid said, this is the biggest-ever investment by a foreign firm in Israel. What’s it for? Although the company has not provided confirmation, according to reports this is Intel preparing for its shift to a 10-nanometer manufacturing process (Ireland was the other country vying for the chance to play host to this transition.)

Ten nanometers refers to the lines etched on the chips. The smaller those lines, the more transistors you can pack in. This makes for more powerful yet energy-efficient chips. Right now Intel has just moved from a 22nm manufacturing process to 14nm – the result is the line of Core M processors that will allow new Intel-based tablets and laptops to operate without the need for a cooling fan, in turn making it possible for manufacturers to make thinner devices.

For Intel, this will provide a way to combat its nemesis ARM, whose chip architecture is generally less power-hungry and is found in most mobile devices today. Particularly if wearable computing takes off, smaller will continue to be better — although 10nm is where the properties of silicon start to break down, perhaps necessitating the use of newer materials.

For Israel, the fab upgrade will apparently create 1,000 more jobs by 2023. Those tax concessions and government grants aren’t just for bragging rights, after all.

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