Israel Approves $185 Million Grant for Intel Fab

The Israeli parliamentary finance committee approved a $185 million grant to Intel in return for meeting job creation targets and local contract guarantees.

Last May, Intel announced it would spend $5 billion over two years to upgrade its Fab 28 in Kiryat Gat, Israel, from 22nm to 10nm production technology.

Israel's grant is conditional on Intel meeting its already announced commitment to hire 250 new staff at the fab, and on awarding contracts worth around $560 million to local suppliers.

Earlier this month, Ann Kelleher, Intel’s senior vice president and general manager of manufacturing and operations, said the company was planning for manufacturing site expansions in Oregon, Ireland and Israel, with multi-year construction activities expected to start in 2019.

In a blog post, Kelleher said, “Having additional fab space at-the-ready will help us respond more quickly to upticks in the market and enables us to reduce our time to increased supply by up to roughly 60%. In the weeks and months ahead, we will be working through discussions and permitting with local governments and communities.”

Kelleher said it was part of the company’s strategy to prepare the company’s global manufacturing network for flexibility and responsiveness to demand. As part of this, the company is spending to expand its 14nm manufacturing capacity, made progress on the previously announced schedule for the Fab 42 fit-out in Arizona, and located development of a new generation of storage and memory technology at its manufacturing plant in New Mexico.

Kelleher also said that Intel would also supplement its own manufacturing capability with selective use of foundries for certain technologies "where it makes sense for the business." The company had already been doing this but will do so more as it aims to address a broader set of customers beyond the PC and into a $300 billion market for silicon in cars, phones, and artificial intelligence (AI) based products.