Late last year Intel announced massive plans to increase its global chip production capacities by upgrading, expanding, and equipping four of its fabs. As it turns out, the company is not going to stop there and is considering to build a brand new fab in Israel, which will cost $11 billion.

Moshe Kahlon, Israeli Finance Minister, on Tuesday confirmed that Intel had applied for a grant of about $1 billion from the government for its new investment plan to build a fab that would cost $11 billion. If everything goes as planned, the investment will not only be the biggest of its kind in Israel, but Intel will also build the largest semiconductor fab in the region. Furthermore, the expansion will add 1,000 new employees to Intel’s staff of approximately 13,000 in Israel.

“The moment the company comes to Israel and invests $10 billion, and it receives a grant of 9%, that means 91% of it stays here,” said Mr. Kahlon in an interview on Army Radio. “There are always such discounts, there are always incentives.”

Intel and Ministry of Finance reportedly started talks about the new fab several weeks ago, so the production facility is a few years away. In addition to securing incentives from the Israeli government, Intel will have to apply for permissions from various local authorities. That said, peculiarities of the fab as well as process technologies that it will use remain to be seen.

Since Intel is already investing in two fabs in the U.S. (Fab 42 in Arizona and D1X in Oregon), a fab in Ireland, and a fab in Israel, it is unlikely that Intel needs to start building another fab in Israel as soon as possible.

In addition to manufacturing operations, Intel also has rather vast R&D operations in Israel. The company develops CPU microarchitectures, Mobileye advanced driver-assistance systems (ADAS), RealSense 3D cameras, communication, and other technologies in the country. The addition of an advanced fab will clearly increase significance of Israel for Intel.

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Sources: Globes, Reuters

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  • FunBunny2 - Tuesday, January 29, 2019 - link

    with the Chinese consumer imploding, where is the increase in aggregate demand going to come from? unemployed coal miners?
  • boeush - Tuesday, January 29, 2019 - link

    "unemployed coal miners?"

    More likely, gainfully employed wind turbine technicians...
  • Samus - Wednesday, January 30, 2019 - link

    I know someone who used to be a coal mine technician, now working for Clipper Windpower in Delaware for twice as much salary :P
  • FunBunny2 - Wednesday, January 30, 2019 - link

    "coal mine technician, now working for Clipper Windpower"

    ain't nearly enough of those kind to offset the loss of China. the massive tax cut (you remember that) hasn't put $4,000 in the pockets of the middle class.
  • dromoxen - Saturday, February 2, 2019 - link

    thats just hot air?
  • boeush - Tuesday, January 29, 2019 - link

    Also: "consumer imploding" == economy grows at ONLY 6.3% annually, as opposed to the "non-imploding" 6.9%:

    In other words, "exploding" == "non-imploding", while "exploding somewhat less intensely" == "imploding"...
  • FunBunny2 - Wednesday, January 30, 2019 - link

    fact is, iPhone (and other hardware?) is falling off a cliff. income concentration continues unabated here and around the world. aka, aggregate demand is stalled and will stay that way until the middle class re-appears. and it's not just IMF/ECB/Fed/other-left-wing-pundits calling growth in danger, just look at corporates' statements. Intel is behaving as an extreme outlier.
  • ksec - Wednesday, January 30, 2019 - link

    200M iOS devices with Intel Modem next year, Intel ship roughly ~270M CPU per year. Even the die size of Modem is smaller, it is still an substantial amount of fab requirement.

    Ever increasing usage in Cloud, ML, AI. And lots of Server upgrade cycle coming.

    Intel GPU, also for GPGPU as well.

    None of these are surprises, Intel Fab capacity just wasn't prepared for it. Which is why many are saying their management were sub par.
  • HStewart - Tuesday, January 29, 2019 - link

    1. Their process is behind.

    Making a CPU not just about process - and 10nm process coming this year can not be based on Cannon Lake.

    2. The cost of new process is only going to explode.

    It is nature ever going smaller process to is going to cost more.

    3. They are not TSMC, process node is not their BnB.
    Yes, they have money right now, but what in 10 years?

    TSMC has process issues - which they state is because of chemical problem but it could be more than just. It is good thing that has more business that just the process node so - They have proven even with struggles of 10nm that they can prosper with out it.
  • frenchy_2001 - Wednesday, January 30, 2019 - link

    "TSMC has process issues - which they state is because of chemical problem but it could be more than just"

    It would be weird for them to have "process Issues" on their 16/12nm, which is pretty mature at the moment, while being fine on their 7nm node (the bleeding edge one).
    So, contaminated chemicals sounds reasonable.
    Also, read their investor disclaimers. They have to be truthful in those (or they can be sued).

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