Intel Corporation (NASDAQ:INTC) is reportedly in talks with Israeli government over a proposed $10 billion (U.S.) investment in Israel, says a report from Reuters citing a senior government official.


Nahum Itzkovich, the new director of the Economy Ministry’s Investment Centre told in an interview to Yedioth Ahronoth newspaper on Tuesday “Intel is talking with us about a huge investment of $10 billion.” The official further told that both parties are “engaged in intensive negotiations.”

Proposed Investment

As per the director, the talks are concerning a $3 billion investment to upgrade the existing Fab 28 factory in the southern town of Kiryat Gat, and a $7 billion investment in the town over the course of 10 years.

The Israeli government has formed a negotiating team to discuss matters with Intel Corporation (NASDAQ:INTC) officials, of which Economy Minister Naftali Bennett is a part. The team is negotiating to forge a long term investment process where “each side will commit for at least 10 years.”

Negotiations are going on regarding a manufacturing facility that will be crucial for the local economy, Itzkovich added. He further says, it is the responsibility of the government to evaluate the proposal and explain to the people of the benefits of the investment.

Intel may produce 10nm chips in Israel

Ireland was the last foreign country where Intel Corporation (NASDAQ:INTC) made the investment. As per Itzkovich, if the chip maker do not invest in Israel this time then the country will no longer be relevant to Intel.

In the next two to three years, Intel Corporation (NASDAQ:INTC) will start manufacturing the chips measuring just 14 nm in Ireland and the United States. However, the chip maker has still not decided where it will produce its 10 nm chips. In February, Intel Israel executives hinted that it will prefer to produce 10 nm chips in Israel.

Previous Investment

In the past decade, Intel has invested around $10.5 billion in Israel, including $1.1 billion in 2012. Israeli government has also given $1.3 billion in grants.

The official did not reveal much on the grant or subsidy that the government is planning to provide the chip maker.

Intel Corporation (NASDAQ:INTC) spokesman refused to comment on the matter while the ministry officials were unavailable for comment.