Intel prepares to expand manufacturing in Israel as part of global plan

Multi-year construction activities to expand manufacturing sites in the US, Ireland and Israel are expected to begin in 2019, tech giant says

Shoshanna Solomon was The Times of Israel's Startups and Business reporter

Intel Corp.'s 8th-Gen-Intel-Core-i3-8100 chips  (Courtesy)
Intel Corp.'s 8th-Gen-Intel-Core-i3-8100 chips (Courtesy)

Intel Corp. is preparing plans to expand its manufacturing facilities in Israel, Ireland and the US state of Oregon, a senior official at the US technology giant said in an editorial posted on the website of the firm.

“With the biggest market opportunity in Intel’s history ahead of us, we will take the necessary steps to prepare our global manufacturing network for flexibility and responsiveness to changes in demand,” Ann Kelleher, senior vice president and general manager of Manufacturing and Operations at Intel, wrote. “We are now in the early planning phase for manufacturing site expansions in Oregon, Ireland and Israel, with multi-year construction activities expected to begin in 2019.”

The US firm is transitioning from being a maker of silicon computer chips to a data-centric company, with activities ranging from the manufacturing of chips to developing safety features in vehicles, wireless phone connections, drones and cloud-based technologies.

“Intel’s ability to optimize and apply our manufacturing expertise to deliver more advanced, differentiated products is foundational to our current and future success,” Kelleher wrote.

Having additional factory space ready “will help us respond more quickly to upticks in the market and enables us to reduce our time to increased supply by up to roughly 60 percent,” she wrote.

In the weeks and months ahead, Intel will be holding discussions with the aim of getting the necessary permits, with local governments and communities, she said.

The expansion of sites and the related investments “will be taken in stages,” she wrote, and will be subject to change based on business, economic and other considerations, she said.

In May, Intel confirmed plans to invest $5 billion (NIS 19 billion) in expanding its Kiryat Gat production plant in Israel, where it produces and develops some of its most advanced computer chips, through 2020. As part of the investment plan, Intel is expected to get a 5 percent tax rebate until the end of 2027, as well as a NIS 700 million government grant.

Since setting up operations in Israel in 1974, the US firm has made cumulative investments and acquisitions of some $35 billion in Israel, as of May 2018, and has grown into the largest private sector employer in the high-tech industry, employing 11,000 workers.

The firm last year acquired automotive technology firm Mobileye for a whopping $15.3 billion. There are some 1,000 additional workers employed in Mobileye. Intel has a manufacturing plant in Kiryat Gat, and R&D centers in Jerusalem, Petah Tikva and Haifa.

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