Intel plans new $15b investment in Israel

Intel is ready to invest up to $15 billion [£9.1 billion] in Israeli production facilities and is talking with the government over an investment that will last for greater than 10 years.

Sources close to the discussions told Haaretz that negotiations are for Intel to either build a brand new production facility that will be upgraded in stages or for it to renew its existing facility in Kiryat Gat before following it up with a new fabrication plant.

The government will be expected to provide a $700 million [£426 million] grant and the sources declined to state if the new money will solely cover the cost of a new plant or be used to fund both the new plant and an upgrade.

A new plant, which will be used to manufacture next generation 10-nanometer microchips, will cost $10 billion [£6 billion] to develop and estimates on the cost of upgrading the existing production line sit at $5 billion [£3 billion].

Intel already employs some 8,000 employees at a semi-conductor plant in Kiryat Gat and in research and development facilities elsewhere. Haaretz reports that the number employed will grow as the plant is being built and coming online but eventually decline as the production line reaches a later stage in its lifespan.

The last time that Israel granted Intel financial assistance was three years ago and the country’s government lobbied the company back in 2011 when it decided to build a new chip in Ireland due to the higher level of financial assistance being offered.

Intel reportedly opted for Ireland due to the Israeli government failing to provide the requested grant of $600 million [£365 million] that would have secure the upgrade of the Fab 28 plant in Kiryat Gan.

Intel Israel is an important contributor to the Israeli economy and in 2012 its exports were worth $4.6 billion [£2.8 billion], which totalled some 10 per cent of the country’s total industry exports for the year.