Intel mulls $10 billion Israel investment

Intel is in talks with the Israeli government about a $10-billion investment in the country.

According to the Yedioth Ahronoth newspaper, Chipzilla is having talks with the Israeli Economy Ministry’s Investment Centre.

The idea is to see what kind of deals Intel can broker with the government in terms of sweeteners.

Nahum Itzkovich, the new director of the centre, said the negotiations were “intensive” which means both sides have brought their rubber hoses.

Under discussion is an investment of $3 billion to upgrade the existing Fab 28 factory in the southern town of Kiryat Gat, and another $7 billion in a new factory in the town over the course of a decade. Israel hopes Intel will make its 10nm chips in the country.

On the Israeli side is a high profile negotiating team that includes economy minister Naftali Bennett.

Israel has been bankrolling Intel for years, but this time the country is after a long-term process in which each side will commit for at least a decade.

Itzkovich did not say how much of a grant or subsidy the government was considering providing Intel for the investment.

There are some worries in Israel that Intel could be lured away by incentives offered in Ireland. Intel’s last overseas investment was made in Ireland and the fear is that if Chipzilla does not build a factory in Israel this time the country could find itself no longer relevant to Intel. 

The Intel plant has an incredible impact on the Israeli economy, Itzkovich said.

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