MOUNTAIN VIEW, Calif.--The Israeli government is attempting to force Intel Corp.’s hand on a decision to potentially build a new fab in the north of the country in exchange for a 1 billion shekel ($264.37 million) grant, according to media reports.
Intel has been putting off the decision of where to build its new fab, and reports in the Israeli media say the country’s Ministry of Finance and Ministry of Industry, Trade and Labor are losing patience with the chip maker.
Israel has now given Intel until early March to make its decision, in an ultimatum that would see the loan expire and the money used as a grant to another multinational, should Intel fail to respond within the timeframe.
Intel had asked for a $600 million grant from the Israeli government back in mid-2011, pointing to the firm’s already large $5 billion investment to upgrade its Kiryat Gat fab, a facility regarded as the most advanced chip manufacturing plant in the world.
Israel, however, only agreed to $264 million, with the condition Intel set up a new fab and assembly plant in the Galilee, specifically, Beit She'an. Building a fab in the area would create hundreds of local jobs in an area which has seen relatively little tech development to date.
Intel –which has been operating in Israel since 1964-- is said to be considering its options, with some rumblings that the firm could choose to plow its multibillion dollar investment into Ireland instead. The firm has also said it will not make a decision until the second quarter of 2012.
well, I certainly wouldn't recommend building a fab in Gaza! But that's Palestine... not Israel :)
And while it's true that there was no official end to the 6 day war, and no peace with Syria, it's still, ironically, our quietest front!
Terror can strike anywhere... Even in the US. Or India. Or Indonesia. Then there are places where natural disasters are a concern... like Japan, or Thailand.... No where is "safe" if you look at all the risks... but Intel has suffered no disruption in Israel since it started operating there. Not natural or otherwise...
that's my point. I get fed up of people being hysterical about life in Israel. I lived there most of my life, and I'm perfectly ok... no trauma! :)
Very valid point. The Israeli design center saved Intel's bacon during he P4 fiasco and has been an essential component in Intel's design efforts ever since. However, that is quite separate and orthogonal to the fab side.
Sylvie, I understand the need to defend the homeland against unfounded generalizations (e.g., Israel being a war zone), but let's not kid ourselves. No diplomatic relations with Syria for decades and no official end the the Six Day War. The Golan Heights? Plus, categorizing the situation in Gaza as anything but a constant state of war is avoiding an inconvenient truth. The distance from Gallilee to he Golan Heights is less than most Americans drive to work one way, so defending Gallilee unconditionally does not stand up to logical analysis. Yes, Israel proper is not a war zone in the strict sense of the word. But it is pretty damn close to a war zone in the strict sense of the word.
I think both of you are looking at the same coin, but from two different sides. Yes, internally Israel is quite stable. The technology sector in particular is THRIVING and is amazing given the country's size. Technion is by all accounts a top-notch institution in some disciplines. However, all it takes to ruin this stability is one serious rift with Iran, or Egypt deciding that it does not want to play nice with Israel any more (not in terms of war, but in terms of economic cooperation and simply allowing goods to flow in/out of Israel). Let's say that Israel decides to bomb Iran's nuclear facilities. WWID (What Would Iran Do?). Probably lob a conventional missile back. Where do you lob it to cause maximum damage? Not Jerusalem, but how about a technology center. Yes, Israel is relatively stable relatively democratic thriving economy TODAY. The problem is that noone really knows that this will be the case 5-10 years from now. Nobody is going to lob a missile at Ireland 10 years from now. And with the depressed economy there is a lot of leverage.
As to why Intel builds fabs in Israel... think about Andy Grove's ethnicity. This was probably a personal thing for him that also kind of made sense.
Hardly. Israel has been important to Intel for a long time and both Dadi and Mooly are products of Intel Israel (and the Technion) rather than drivers of it. And do you really think Intel makes multi billion dollar decisions based on the whims of its Israeli execs? you don't give Intel much credit, do you??
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