SAN JOSE, Calif. - Intel Corp. has obtained a grant from the Israeli government to build a 300-mm fab in that nation, according to a report from Globes.
The trouble? Intel is still reportedly asking for more.
Intel will receive a 741 million shekel grant ($209 million) from the Investment Promotion Center, according to the report. This will be part of Intel's $2.7 billion investment in Fab 28, a 300-mm plant in Kiryat Gat.
As part of the grant, Intel promised to employ 3,100 people at the fab, according to the report. ''The company also promised to make a "best effort" of more than NIS 1 billion in reciprocal procurements,'' it added.
But for some time, Intel has been asking for more. It has been asking for $400 million out of an expected $2.7 billion cost of building and equipping its second fab in the southern Israel location. So as a result, there has been a dispute. The Ministry of Industry, Trade and Labor is reportedly offering only between $200 million and $250 million.
Intel is saying one thing-and doing another. Paul Otellini, the president and CEO of Intel Corp.,recently called for the U.S. government to provide tax concessions for companies that build factories in the United States. Otellini, speaking during a presentation at a Council on Foreign Relations event in New York, said that the concessions, either in the form of tax credits or tax holidays would help create jobs and would make the United States competitive with other countries.
Intel recently confirmed speculation that it will build a new R&D wafer fab in Hillsboro, Ore., and upgrade other existing U.S. facilities for 22-nm production at a total investment of between $6 billion and $8 billion.
The investment will create 800 to 1,000 permanent high-tech jobs and 6,000 to 8,000 construction jobs, Intel (Santa Clara, Calif.) said. The new development fab in Oregon, to be known as D1X, is slated for R&D startup in 2013.
At the time of globalization sooner of later intel would also move to far east, keeping R&D at hometown. Thats fact besides if goverments would see this reality and support them with such bonuses as a result of staying at home and keeping jobs running they wouldnt go far.
Mr.Otellini bargaining with israil (as its a habit in M.East :), with good reason, running factories out of Fareast is quite costly, and i bet will get whatever he requests
Intel's fab in Oregon is a replacement for a fab, D1D, closed in 2009/2010. That fab employed between 900 and 1000 people. So, almost no new net employment. It appears that Intel Oregon employment will be just below the peak in 2006. Actually, the new fab, like the closed one, will be used to bring up (or debug) the latest and greatest process. The fab will be then 'copied-exactly' elsewhere. 'Elsewhere' as in not in the USA.
Otellini has stated that it would cost at least $1B more to bring a fab up in the USA vs rest of world. The new Fab, D1X, is in Oregon because Intel's best bring up team lives in Oregon. It would be quite risky to try to replicate the team elsewhere. Also, it may be impossible to transfer the key team members outside the country.
A lot, if not most, of the $N Billion in equipment is no longer built in the USA. So, much of the investment will go to overseas companies.
It will be nice to have 6000-8000 of Oregon's 40,000 unemployed construction workers employed for up to 2 years. Note: since no new jobs, there is no need for new houses. So, little long-term follow-on construction.
Because of previous deals, Oregon will get no property taxes on the high-tech equipment and almost no income taxes from the chips produced.
I described some of this to someone familiar with 1990's era deals who reacted: "Wow! Oregon is acting like a desperate Third World country!". Based on the story, it would appear that Israel is only half-desperate.
As I commented on the story here: http://www.eetimes.com/electronics-news/4210670/Report--Debate-rages-over-Intel-Israel-fab-semiconductor
Intel Israel has been a very long term arrangement for both the Israeli government and Intel. It is a natural continuation of the existing business. I don't view it has not "keeping jobs in America".
Intel has a history of upgrading and building new fabs in various places. In Oct. 2010, Intel confirmed building a new fab in Oregon for R&D to be opened in 2013 creating between 800-1000 permanent jobs and about 6000-8000 construction job. Intel will also be upgrading 4 other US fabs for a total of $6B-8B investment. Source: EETimes 10/19/2010
In Feb. 2010, Intel finished closing 1 of 4 fabs in Ireland, eliminating ~294 jobs. Source: EETimes 2/19/2010. In the same month EETimes reported that Intel Labs European initiative started in 2009 now has 20 labs and 900 researchers.
I do hope Intel will continue to build modern fabs here in the US and increase jobs here.
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