Intel Israel more than doubles exports, mulls new investment

TEL AVIV Sun Feb 17, 2013 7:53am EST

An Intel logo is seen at the company's offices in Petah Tikva, near Tel Aviv October 24, 2011. REUTERS/Nir Elias

An Intel logo is seen at the company's offices in Petah Tikva, near Tel Aviv October 24, 2011.

Credit: Reuters/Nir Elias

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TEL AVIV (Reuters) - Intel's Israeli subsidiary more than doubled its exports in 2012 to $4.6 billion and is seeking to bring manufacturing of the company's next generation of chips to Israel.

Intel's exports, which rose 109 percent from $2.2 billion in 2011, were boosted by the start of production of chips using 22 nanometer technology at its Kiryat Gat plant in southern Israel, which is now operating at full capacity.

Intel, the world's No. 1 chipmaker, will build chips over the next two to three years with features measuring just 14 nm in Ireland and the United States but the company is already thinking about where it will produce 10 nm chips. The narrower the features, the more transistors can fit on a single chip, improving performance.

Intel Israel executives said they would like to see 10 nm production in Israel.

"The average life of a technology is two to six years so we need to be busy to get the next technology, 10 nanometer," Maxine Fassberg, general manager of Intel Israel, told a news conference on Sunday. "We need to get a decision far enough in advance to be able to upgrade the plant. So for 10 nanometer, decisions will need to be made this year."

Fassberg said upgrading the existing Fab 28 plant in Israel would require a lower investment than building a new plant but would still involve several billion dollars.

Intel Israel has in the past received government grants to help with the costs of its investments and Fassberg told Reuters the company was "constantly in talks with the government".

Intel has invested $10.5 billion in Israel in the past decade, including $1.1 billion in 2012, and has received $1.3 billion in government grants.

The company accounted for 20 percent of Israel's high-tech exports last year and 10 percent of its industrial exports, excluding diamonds.

"If Intel had not increased its exports, Israel's high-tech exports would have shrunk by 10 percent," Intel Israel President Mooly Eden said.

Most of Intel Israel's exports - $3.5 billion - came from its chip manufacturing activities.

Intel is Israel's largest private employer, with 8,542 workers, up 10 percent from 2011. The company has two plants - in Jerusalem and Kiryat Gat - as well as four research and development centers.

Eden said Intel was also committed to investing in start-ups, having invested in 64 Israeli companies since 1996. In July its global investment arm Intel Capital said it would expand its operations in Israel.

(Reporting by Tova Cohen; Editing by Helen Massy-Beresford)

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Comments (8)
StigTW wrote:
maybe a stupid question but why is this operation in Israel not the US/Asia/Germany etc?

Feb 17, 2013 12:07pm EST  --  Report as abuse
usagadfly wrote:
How much US taxpayer money funds Intel Israel? How much tax money otherwise available for US healthcare of its own poor and elderly was diverted, both directly and indirectly, to Israel via tax preferences for Intel investments in Israel? Why does the US Government subsidize companies that invest in high tech in foreign countries while closing US facilities?

These questions need answering by objective sources not with ethnic allegiance to Israel. If that is even possible.

Feb 17, 2013 12:40pm EST  --  Report as abuse
xcanada2 wrote:
It is hard to imagine that anybody could trust that chips coming out of Israel don’t have back doors (secret entrances to your computer) on them! Israel thinks nothing of invading the computers of the world. Israel was evidently very involved in Stuxnet and Flame viruses. Intel-Israel simply provides another way into American minds.

Seems AMD will be a more credible alternative. Unfortunately, it also is going the Israel route: http://www.ynetnews.com/articles/0,7340,L-4302035,00.html
But, at least it is not making chips there yet.

For computer chip backdoor ease, here is a reference:
http://theinvisiblethings.blogspot.com/2009/03/trusting-hardware.html

Feb 17, 2013 1:41pm EST  --  Report as abuse
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