Intel Israel wants gov’t to chip in

Export leader says it needs subsidies to compete with Ireland for new project.

barkat intel fassber 248 ap (photo credit: Ariel Jerozolimski)
barkat intel fassber 248 ap
(photo credit: Ariel Jerozolimski)
Intel Israel, the country’s leading private exporter and the biggest employer in the private sector, is competing with Ireland over the location of the global chipmaker’s second site for the production of smaller 22-nanometer chips scheduled for the beginning of 2012.
“We are competing with other countries led by Ireland on the ability to bring to Israel the 22-nanometer technology,” Intel Israel general manager Maxine Fassberg said Monday at a press conference in Tel Aviv. “We want Israel to be the second country in the world to produce 22-nanometer chips [after the United States], but we have to demonstrate that it is competitive enough in terms of government grants and benefits compared with other countries.
“We have already approached the government on this issue and are in negotiations. A decision needs to be made by mid-March, when Intel is set to decide.”
Thirty-five years after its first investment in Israel, Intel is committed to continuing its activities in the country, provided the government continues to support investments, she said.
The company is negotiating with the government over a substantial grant for the expansion of its Kiryat Gat plant, at an estimated total investment of $2.7 billion, Fassberg said. Intel Israel would commit to add another 400 new workers at the expanded plant if the government offers help, she said.
“Intel’s second 22-nanometer plant will need to start production at the beginning of 2012,” Fassberg said.
Intel Israel generates 10 percent of the country’s industrial exports.
The chipmaker has invested $7.3 billion in its operations in Israel, out of which $1.3b. is grants received from the government.
“2009 is a record year for Intel in Israel and one that surpassed all of our expectations in terms of exports,” Fassberg said. “Exports surged by 145% last year, to $3.4 billion, compared with 2008, thanks to the production start of the new Fab 28 plant in Kiryat Gat, which is now operating at full capacity.”
The Kiryat Gat plant, the third Intel plant to make chips using 45-nanometer technology, was established at a total investment of $1.8b., out of which $600 million was invested by the government, under the Encouragement of Capital Investments Law, and more than $1b. by Intel – the largest investment ever made in Israel by a private company.
In 2009, Intel was the largest employer in the private sector, employing 6,340 workers, Fassberg said. A hiring freeze at Intel Israel was lifted at the beginning of the year, and since then more than 120 workers were hired, she said.
Last November, Intel reopened its revamped factory in Jerusalem, which was its first Israeli factory built in 1985, for final-stage chip production. In recent months haredim have protested against its being open on Shabbat.
“There has been no change of status quo at the Jerusalem plant, whichworks every day 24 hours around the clock in line with regulations bythe Industry, Trade and Labor Ministry,” Fassberg said.
Intel also operates a development center based in Haifa that wasestablished in 1974, the company’s first outside the US, and has designand development centers in Petah Tikva and Yakum. The company’sCentrino product and next-generation chips, including the Core 2 Duoprocessor, were developed in Israel.