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Intel Corp. revealed on Sunday, April 2, that it will be spending $600 million for its chip plant in Israel. The company is investing more as it would like to expand its research and development (R&D) division in the said factory.
As per Reuters, with the additional funding, it is now confirmed that Intel invested a total of $10 billion for this chip plant in Israel. The expansion of the R&D was announced when Intel’s chief executive officer, Pat Gelsinger, visited Israel as part of his European tour, where he also had stopovers in Belgium and Germany last week.
Where the new investment will go
Intel will be dividing the $600 million that it just allotted for its new chip facility in Israel. It was said that $400 million will go to the Mobileye unit of the company that is currently headquartered in Jerusalem. This unit will be transformed to become an R&D campus for developing autonomous vehicle technologies.
The remaining $200 million will be used to fund the construction of an R&D hub that Intel named IDC12. This will be located close to its current development center, in the northern port city of Haifa.
Based on the report, Intel’s chip facility that was described as a "mega chip design," has a capacity to employ around 6,000 workers. Intel is currently the largest tech employer in Israel with almost 14,000 employees.
In any case, during his visit, Gelsinger also said that with the new plant, he is looking forward to “a vibrant future for Intel and Israel for decades to come." It was not disclosed though if the new factory is producing smaller chips since its Fab 28 plant in the city in the Southern District of Israel, Kiryat Gat, is already producing 10-nanometer (nm) chips.
Efforts to solve chip shortage
Fox Business reported that Intel’s investments in its new chip plant are also part of the plan to ease the chip shortage that has already affected various companies around the world. Its plant in Israel is already in the first phase of construction so it may begin the extra production for chips not long from today.
Finally, Intel’s exports from Israel surged to a record $8 billion in 2020 compared to just $6.6 billion in the previous year. The number accounts for 14% of total tech exports and two percent of the country’s GDP.
