Intel holds out for more cash in Israel

Troubled fashion bag maker Intel is considering what it should do about the location of a new multi-billion dollar semiconductor plant using new 10 nanometer technology.

Israel is one of a number of countries competing to host the new plant and Intel appears to be dragging its feet on making a decision, probably because it does not want to spend too much dosh when things are not going that well.

Maxine Fassberg, general manager of Intel Israel, told a news conference that Intel will make its decision as late as possible. Until it needs to, Chipzilla will not decide. However, she pointed out that the next technology it has will come this year.

Intel has already held talks with the Israeli government, which must offer incentives to be competitive, said Fassberg, manager of Intel’s Fab 28 plant in the southern town of Kiryat Gat.

Already there is some doubt that the plant will be built in Israel, despite some deals offered by the Israeli government. However, Chipzilla appears to be miffed that the level of subsidy in the land of milk and honey is getting less.

Intel has received grants of more than 28 percent of its investment when it built Fab 18, which started operating in Israel in 1999. This amount fell to 15 percent for Fab 28 in 2008, and when it upgraded Fab 28, the grant amounted to only seven percent. Our guess is that Intel is holding out for more cash before making its decision.

In its 40 years in Israel, Intel has invested $10.8 billion in plants and development centres and received $1.5 billion in grants. It employs nearly 10,000 people.