Giant Intel plant opens in Kiryat Gat

The plant hopes to produce about $3 billion worth of chips annually - equal to nearly 2% of Israel's gross domestic product.

intel chip 88 298 (photo credit: Courtesy of Intel)
intel chip 88 298
(photo credit: Courtesy of Intel)
A hot Negev sun was unable to dissuade hundreds of employees, politicians and Prime Minister Ehud Olmert from congregating at Kiryat Gat's industrial park on Tuesday, to oversee the opening ceremony of Intel's new $3.5 billion microprocessor plant. "The facility, known as Fab 28, is the third Intel plant to make chips using what is known as 45-nanometer technology," said Maxine Fassberg, vice president and general manager of Intel Israel, after dancers and a song troupe kicked off the ceremony. "It will produce its first chips in about seven weeks." "[The plant] is going to be a key producer in the Intel manufacturing network," said Intel CEO Paul Otellini in a taped address broadcast over a huge screen to the audience. Intel, whose chips are used in about 75 percent of the world's personal computers, is counting on the technology to widen its lead over one it's main competitors, Advanced Micro Devices Inc. Last November, Intel began selling 45-nanometer chips for servers, computers that handle corporate networks, and in January introduced them for notebook and desk computers. The Kiryat Gat facility will add about 200 people to its workforce by the end of the year, to a total of about 2,000 jobs, Intel Israel spokesman Koby Bahar said. The Santa Clara, California-based Intel currently employs 6,100 people at its five Israeli facilities. Speaking of the impact Intel has had on the Israeli workforce, Prime Minister Ehud Olmert told the crowd that he saw only a growing relationship between the Israeli government and the hi-tech giant. "I promise that you are going to see tens of thousands of Israelis in the area, working in hi-tech," he said. "It will only make the region blossom." Funding for the project included a $525 million government grant, as the plant hopes to produce about $3 billion worth of chips annually - equal to nearly 2% of Israel's gross domestic product. Citing great cooperation between the government and the corporation, Intel Government Relations Manager Joseph Shoval told The Jerusalem Post that the rate at which his company has progressed in Israel would have been impossible without key teamwork from both sides. "Intel has been in Israel for 34 years," Shoval said after the ceremony. "It's been a huge boost for the country and for Intel. But two things have made this growth possible - an excellent workforce, which is well-educated and innovative, and wonderful cooperation with the Israeli government." The plant is adaptable and could even begin producing 32-nanometer chips that Intel plans to start making next year, said Oren Reiss, the facility's general manager. By narrowing the width of circuits on computer chips, measured in nanometers, or billionths of a meter, chipmakers can pack more of the devices on to discs of silicon from which they are made. That allows companies to get more components out of a single production run. Intel built its first Israeli factory in Jerusalem in 1985. That plant is being revamped and will reopen next year for final-stage chip production. Intel also operates a development center based in Haifa that was established in 1974, the company's first outside the US, and also has design and development centers in Petah Tikva and Yakum. The company's Centrino product and next-generation chips, including the Core 2 Duo processor, were developed in Israel. Bloomberg contributed to this report