Intel rumored to plunk $10bn down for Israeli fab expansion The Israeli government, obviously excited to see more investment from chip giant Intel, has let the cat out of the bag that Chipzilla's plans to plunk $10bn into chip manufacturing plants in the Middle Eastern country. The rumor that Intel was looking to invest big bucks in its Israeli operations, reported first in the paper …
There's no business logic to putting fab in Israel - even if the design expertise is local, there's no reason you need to produce the things there. Logically you'd put a production plant somewhere with high tech manufacturing skills and lower labour costs, and ideally somewhere close to your major markets. That means Asia, since most demand comes from the Chinese assembly plants for IT devices. In terms of jobs, a typical fab would be around a thousand employees. with four times that number building it for a couple of years.
I suspect the rationale is simply the US government subsidising Israel, as usual. Encouraging Intel to put a fab expansion there is a way of disguising that it's a subsidy. Intel will have either been leaned on and reminded how much they need the US government, or more likely offered some tax loophole, so that ultimately the US taxpayer funds it.
'Logically you'd put a production plant somewhere with high tech manufacturing skills and lower labour costs, and ideally somewhere close to your major markets. That means Asia'
Um...Israel *has* a good deal of high tech manufacturing skills and lower labour costs. Plus the last time I looked at a map, the Middle East is at the join of Europe, Africa and ... Asia.
Wow, what massive sums of cash! Companies like Intel don't mess about. Compare these mega investments they make with the amount that this satellite cheese mining company boldly announced today they were going to invest in a telescope - about 1.5 million dollars. Probably 1.45 million of that will go on expensive dinners and lavish perks...
Many people don't realize it was the folks in Israel that saved Intel's bacon from the P4 Netburst fiasco. If the Israel folks hadn't decided to take the P3 design and optimize the crap out of it and thus turning into the core line (for laptops initially) this article might have been about AMD (buying ATI was real smart there guys) instead. The worst part is from what I heard not only was Intel upper mgmt not all that grateful but that they really take advantage of their Jewish work force and their work ethic (ie overwork, underpay, force holiday work, etc). Typical sociopathic upper management I guess. Every last penny for them no matter the cost.
You need an awful lot of very clean water to make chips these days, a commodity of great scarceness in the region - itself a likely trigger point for the "water wars" that many consider inevitable.
Given a country that has such an unsentimental approach to the resources and properties of others, is it responsible of Intel to be adding to the amount of resource they need to sequester?
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