Intel seeks grant for upgrade of Israel chip plant

JERUSALEM Sun Jun 12, 2011 11:20pm IST

The entrance to the headquarters of Intel Corporation in Santa Clara, California is seen in this February 2, 2010 file photo. Intel Corp is planning another expansion of its chip plant in southern Israel and is seeking a government grant for part of the funding, Israel's Industry and Trade Ministry said on Sunday. REUTERS/Robert Galbraith/Files

The entrance to the headquarters of Intel Corporation in Santa Clara, California is seen in this February 2, 2010 file photo. Intel Corp is planning another expansion of its chip plant in southern Israel and is seeking a government grant for part of the funding, Israel's Industry and Trade Ministry said on Sunday.

Credit: Reuters/Robert Galbraith/Files

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JERUSALEM (Reuters) - Intel Corp (INTC.O) is planning another expansion of its chip plant in southern Israel and is seeking a government grant for part of the funding, Israel's Industry and Trade Ministry said on Sunday.

The ministry said the chipmaker plans a $4.8 billion expansion and technology upgrade to produce wafers with 15-nanometre technology at its Fab 28 chip plant in Israel's southern town of Kiryat Gat.

It said Intel has asked Israel's government for an unspecified grant, and Israeli media put the amount at $500 million to $960 million since Intel typically asks for 12-20 pct of its planned investment.

Intel, the ministry said, will hire 1,300 new employees at its new plant that will raise its workforce to 4,400.

An Intel spokesman in Israel confirmed the company put in a grant request but he said this did not mean Intel would go ahead with the upgrade and expansion.

Industry and Trade Minister Shalom Simhon said in a statement the ministry would review Intel's request. He added that the grant application was a vote of confidence by Intel in Israel's operations and that he hoped it would mean the expansion of its activities and investments.

The world's No.1 chipmaker opened its $3.5 billion Fab 28 chip plant in 2008 and makes processors with 45-nanometer circuitry.

The Kiryat Gat plant is already being upgraded to become Intel's second worldwide to produce the smaller, next-generation 22-nanometer chips at a cost of $2.7 billion. The first will be in the United States.

Israel in January approved a more than $200 million grant for Intel to upgrade to 22 nanometres.

(Reporting by Steven Scheer; Editing by Hans Peters)

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