Brian, more Intel. This time in Israel. Welcome back. I hope you had a great time. Best regards, Jeff
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COMPANIES & FINANCE: INTERNATIONAL: Intel puts Israel on shortlist for expansion
91% match; Financial Times ; 02-May-2000 12:00:00 am ; 295 words
Intel, the world's biggest maker of semiconductors, has opened talks with the Israeli government on a potential Dollars 3.5bn investment to expand a manufacturing facility there.
Israel is one of several sites under consideration. The others are in Ireland, Arizona, Oregon and New Mexico. Intel has existing plants at all the sites.
The investment has attracted high-profile attention in Israel as it would rank as the single biggest foreign direct investment in the country, outstripping the Dollars 1.6bn plant Intel opened last year in Kiryat Gat, southern Israel. That investment included Dollars 600m of Israeli government grants.
The new investment could generate up to Dollars 2bn in exports for Israel and boost Intel Israel's workforce by about 2,500 to 6,500.
Intel officials yesterday met Avraham Shohat, Israeli finance minister, for exploratory talks on securing a grant package for a new investment of between Dollars 2.5bn and Dollars 3.5bn to expand the Kiryat Gat facility. Ran Cohen, Israel's trade and industry minister, will today meet Intel officials in New York to continue the talks.
Intel, which has a Dollars 6bn capital spending budget for this year alone, stressed that it has not yet decided on where to located the new semiconductor plant. It said it was "pre-qualifying" each site by obtaining permits and conducting regulatory reviews involving talks with local government officials.
In 1996, the 38 per cent grant provided to the Kiryat Gat facility sparked a controversy over the project's contribution to the Israeli economy. As a result, Israel reduced the incentive grants it provides to direct investments in priority zones to between 20 and 24 per cent.
But the trade and industry ministry has told Intel its Dollars 400m annual investment incentive budget cannot support such a big project.
The investment would be used to expand the Kiryat Gat plant, which currently employs more than 3,000 workers to produce the Pentium III 733 MHz chip, using 0.18 micron technology.
Intel has a research and development centre in Haifa and a Jerusalem facility manufacturing 130 products.
Copyright ¸ The Financial Times Limited
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