Boston, MA 01/02/2014 (wallstreetpr) – The U.S. semiconductor giant in Intel Corporation (NASDAQ:INTC) could invest up to $15 billion in Israel over a decade, this is according to sources familiar to the discussions.
Last month it was reported that the company was planning to either upgrade its existing facility in the country or roll out a wholly new plant.
Intel Corporation (NASDAQ:INTC) has a 20-nanometer microchips manufacturing plant in Kiryat Gat, Israel as well as research and development centers elsewhere. The company is expected to upgrade these plants to manufacture 10-nanometer microchips.
In 2012 Israel missed the investment opportunity from Intel Corporation (NASDAQ:INTC) when the company chose to invest in Ireland after the country offered it better terms. This time around Israel is vying for the investment opportunity to boost its employment numbers and export earnings.
The deal
If Intel Corporation (NASDAQ:INTC) decides to develop a new production plant and also upgrades its existing facilities, the Israeli government is reported to have promised a grant that could be as much as 10 percent of the total investment cost for both new and upgraded facilities.
However, the grant could be small if the company only decides to upgrade its existing facilities. In this case, the government could commit to just about 3 – 4 percent of the upgrade cost.
Intel Corporation (NASDAQ:INTC) currently employs more than 8,500 people in Israel in its existing production plants and research centers. The company is interested to have this employment number increased through establishment of new facilities by the company as well as upgrade of the existing plants.
Opportunity
Intel Corporation (NASDAQ:INTC) is upgrading its facilities in various countries to improve its position in the high-end chip market. The company is of late manufacturing more smartphone and tablet chips as the demand in these segments grow.
If it decides to invest in Israel this year, it will have to also plan investments in Ireland and the U.S. for the upgrade of its facilities in the countries as well as development of new one to meet the demand for tiny microchips.
Intel Corporation (NASDAQ:INTC) is expected to release its fiscal 2013 third quarter results on January 16, 2014. Investor will be looking to see how the company is dealing with the problem of decline in the PC market and how its position in mobile chips is improving.
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