FILE PHOTO: Intel logo is seen behind LED lights in this illustration taken January 5, 2018. REUTERS/Dado Ruvic/Illustration/File Photo

JERUSALEM (Reuters) - Intel Corp has committed to buy 15 billion shekels ($4 billion) of Israeli products and services over the next six years as it begins a massive expansion of its local operations, Israel’s economy ministry said on Wednesday.

The California-based chipmaker will receive an Israeli government grant of 9 percent of its planned 40 billion shekel investment to expand its manufacturing operations in the country.

As a condition, the economy ministry said, Intel agreed to spend 15 billion shekels in “reciprocal procurement” from Israeli companies.

Economy Minister Eli Cohen said an agreement of this magnitude “will lead to the growth of many companies in the economy, to an increase in their activities and to success in international markets as well”.

Intel is already one of the biggest employers and exporters in Israel, where many of its new technologies are developed.

The expansion of its Kiryat Gat manufacturing site will add 1,000 new employees to Intel’s workforce of almost 13,000 in Israel, government officials said.

Last month the chip giant said it began plans for site expansion projects in Ireland, Israel and at its U.S. plant in Oregon as it looks to diversify its products for a broader set of customers, such as auto safety and wireless connections for mobile phones.

Intel’s exports from Israel rose by $300 million in 2018 to $4 billion, while it bought $1.7 billion of products from local companies.

($1 = 3.6768 shekels)