Intel and two Israeli ministries this week announced that the chip giant plans to invest $5 billion in its Kiryat Gat fab complex – Fab 28 – through 2020. Under the plan, Intel is expected to buy various products from local suppliers and hire additional personnel. In return, Israel will provide the processor maker a tax rebate and a government grant. Furthermore, Intel will receive another grant if it upgrades its manufacturing in Israel further.

Under the terms of the investment plan, Intel will invest $5 billion (NIS 18 billion) in its Kiryat Gat ventures until 2020. The chip giant is expected to buy $838 million (NIS 3 billion) worth of local goods and add 250 people to its workforce, reports The Times of Israel citing the Finance Ministry. If the plan is approved by the Israeli authorities, Intel will get a 5% tax rebate till 2027, as well as a $195.5 million (NIS 700 million) government grant. Additionally, if Intel decides to “significantly upgrade” its fab “technologically”, the company will get another $195.5 million grant.

Haaretz newspaper reports that the new $5 billion investment plan focuses on production expansion, but not on manufacturing technology upgrades. This is not be the first announced expansion of Fab 28 in the recent years. Intel took over Micron’s 200-mm fab in Kiryat Gat in 2013 (after transferring its Fab 18 to Numonyx in 2008 and then selling its stake in the company to Micron in 2010), then disclosed plans to convert it to 300 mm wafers and make it a part of the Fab 28 complex. It is unknown whether all the conversions/upgrades have been completed.

Back in 2014, Intel and Israel's ministries of economy and finance agreed to a plan under which Intel would invest $6 billion in Fab 28 in a bid to prepare it to produce CPUs using its 10 nm process technology. Since the latter has been delayed to the 2018 – 2019 timeframe, it is likely that the new production lines that went online in late 2016 are using Intel's 14nm process, though Intel has not officially confirmed this. Meanwhile, it is unclear where Intel's progress stands on installing the latest DUV equipment needed to produce 10 nm CPUs at the fab, which is a prerequisite to upgrading to future process nodes.

On a final note, after reaching out to Intel to get more details on their current and future investment plans for Fab 28, we did eventually receive the following statement from Intel:

“Intel has submitted a business plan to the Israeli Government for a project to expand its manufacturing facilities at Kiryat Gat. The project is being undertaken to meet future manufacturing needs. [...] It is a usual part of the investment and upgrade cycle. [...] I can also confirm that in 2014 Intel started a project to upgrade the fab.”

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Sources: The Times of Israel, Haaretz

Image Source: CalcalisTech

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  • Samus - Monday, May 21, 2018 - link

    Well, don't forget Bonias and Dothan were developed in Israel. In fact, they developed it shortly after the Pentium 4 released and were practically begging Intel for years to ditch Netburst because they had something better: an optimized and modern Pentium 3 execution core on the modern Pentium 4 bus. This was the end of Netburst P4's, and especially the joke that was the P4-M, and the birth of the Core microarchitecture that would make Intel competitive with AMD.

    And as we all know, Israel doesn't like AMD, just ask CTS labs :P
    Reply
  • Zingam - Saturday, May 19, 2018 - link

    Also you can pretty sure that Intel is obliged to invest in Israel but there is no basis for conspiracy theories too! Reply
  • willis936 - Sunday, May 20, 2018 - link

    Right? I'd love to know why they chose Israel. They have a lot of human resources in Israel but it doesn't make much business sense to want to keep investing in a place as volatile as Israel. It hasn't cost them money yet but it's shortsighted to think that it won't in the future. Reply
  • id4andrei - Sunday, May 20, 2018 - link

    Israel offers a lot of state aid for top companies like Intel. Intel had one plant in Ireland but state aid is illegal under EU rules. Israel does not have that problem. Reply
  • GreenReaper - Sunday, May 20, 2018 - link

    There's a relatively low chance of sanctions being applied to Israel in the near future by the countries where Intel makes the most of its money. Also, Israel has a lot of sand. Reply
  • Sttm - Sunday, May 20, 2018 - link

    Yeah but they are going to win that war if it breaks out.

    Also they have a ton of excellent people to get the work done.

    As Zingam points out, it was Israelis that came up with Core the cpu architecture. The architecture that led to total Intel dominance, a win streak that went for over a decade until Zen. Saving Intel after the failed Pentium 4. The talent pool is deep, and Israel is welcoming to business.
    Reply
  • Spunjji - Monday, May 21, 2018 - link

    In turns of security of the investment, who "wins" that war is irrelevant. Reply
  • id4andrei - Monday, May 21, 2018 - link

    It is Intel that came up with Core as it was Intel money that funded research. Intel could have produced Core in many other countries other than Israel, it was cheaper and Israel offered a lot of state aid to attract top companies like Intel. Reply
  • SharpEars - Tuesday, May 22, 2018 - link

    You dismiss the fact that the concentration of high-end PhD level talent in Israel is very high, including former Soviet nuclear scientists and physicists that have "beyond PhD" educations/training. Reply
  • willis936 - Wednesday, May 23, 2018 - link

    You are incredibly ill informed to think that kind of talent is localized or even in a high density to a small region compared to other developed nations. Go to more meetings. Reply

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