Intel Corporation on Thursday approved the investment of $3.5 billion into building FAB 28, its new chip plant in Kiryat Gat, in what represents the largest investment ever made by an industrial company in Israel. "This is our largest investment in Israel to date, and as a one-off investment one of the largest investments Intel has made worldwide" said Tom Franz, vice president and general manager of Intel Corporation's Fab/Sort Manufacturing. FAB 28 is set to start producing microprocessors in the second half of 2008 on 45-nanometer process technology. Construction on the 200,000-sq.m site, Intel's second 45-nm. factory, has already started. Intel also announced Thursday it would invest $600 million to upgrade FAB 18, its existing chip plant in Kiryat Gat. This week the Knesset Finance Committee approved the controversial $525m. grant, or 15 percent of the investment into the new project. The Industry, Trade and Labor Ministry said the new factory would inject $450m. into the economy, with Israeli law stipulating that the government receive 23.5% of the profits. Intel said Thursday it expected annual production at the new plant to reach $3b. "Without the grant approval for the new project from the Israeli government, we would have decided against Israel as a location for FAB 28," Intel Israel general manager Alex Kornhauser said. "But the grant approval together with an established workforce and infrastructure made Israel the best place for the new plant." The new factory will employ 4,400 workers, 2,000 of whom will be newly recruited and the rest subcontracted. Additional employees at the FAB 18 plant will be recruited mostly from Kiryat Gat and the southern region. At the end of 2005, Intel said it had a workforce of 6,600 at its development and production facilities in Haifa, Jerusalem, Kiryat Gat, Petah Tikva, Yakum and Yokne'am.