Intel plans $11 billion Israeli factory; Oregon announcement imminent – By Mike Rogoway (The Oregonian/OregonLive) / Jan 29 2019
Israeli officials said Tuesday that Intel plans a new $11 billion factory there, subsidized by a $1 billion government grant.
It’s part of a broader expansion Intel announced last month. An announcement about a pending Oregon factory expansion will apparently come early next week, though the company reiterated that its plans remain contingent on economic factors and business needs. That appears to suggest a measure of uncertainty around the expansion’s timing.
Intel already has substantial operations in Israel, where the upcoming expansion is projected to add 1,000 jobs to the 13,000 already there.
“The moment the company comes to Israel and invests $10 billion, and it receives a grant of 9 percent, that means 91 percent of it stays here,” Finance Minister Moshe Kahlon told Israeli Army Radio, according to Reuters. “There are always such discounts, there are always incentives.”
Intel did not confirm the specifics included in Kahlon’s announcement or disclose details or a timeline for its plans. In a statement, Intel said only that it will submit a business plan to Israel outlining investment in the company’s manufacturing site in Kiryat Gat.
“This is consistent with Intel’s previous announcement that the company is in the early planning phase for manufacturing site expansions in Oregon, Ireland and Israel,” Intel said in a written statement to Bloomberg.
Intel is preparing for a major expansion in Hillsboro, with an announcement due within a week. Company officials have invited nearby residents to a meeting Monday to discuss “our planning phase for expansion at our Ronler Acres campus,” according to a letter neighbors received.
“Intel business is growing thanks to strong customer demand for our products and our expansion into new market opportunities,” the company said in its letter to neighborhood residents. “It is important to note that site expansion and the related investment will be taken in stages and are always subject to change based on business, economic and other factors.”
Intel representatives have told Oregon contractors and trades people that it plans to build a third phase of its massive D1X research factory at Ronler Acres, near Hillsboro Stadium. However, some with knowledge of the company’s plans say Intel officials have suggested the project is at least somewhat contingent on the economy.
Though based in Silicon Valley, Intel’s largest and most advanced operations are in Washington County. With 20,000 Oregon workers, the company is the state’s largest corporate employer.
Though Intel won new subsidies for the Israeli project, the company’s existing package of Oregon tax breaks would apply to any expansion here. Those incentives exempt billions of dollars in equipment from local property taxes other Oregon businesses pay. Those savings were worth $193 million to the company last year alone.
Intel is Oregon’s single largest economic engine. The county values the chipmaker’s Washington County property at $11.7 billion and a large ecosystem of suppliers operate in the company’s orbit, providing equipment and services to keep Intel’s factories running.
Intel said last week it doesn’t expect material growth in its business during 2019 amid a slowdown in the Chinese economy, the growing trade war, and cooling demand from data centers.
It takes years to build and equip a new semiconductor factory, though, and Intel may need new factories to accommodate future demand and new manufacturing technologies.
Intel plans to use a new production technique called extreme ultraviolet lithography, or EUV, for a new class of smaller, 7-nanometer computer chips. At present, though, the only Intel factory that can accommodate EUV is D1X in Hillsboro.
The company is preparing to open a new factory in Arizona, Fab 42, that is designed to accommodate the huge EUV tools. The pending expansions in Israel and Oregon would presumably also be designed to accommodate EUV.
