Intel Plans New Israeli Fab

Intel(INTC Quote) will spend $3.5 billion to build a new wafer fab in Israel over the next several years, the microprocessor giant said Thursday.

The factory will produce 300-millimeter wafers from which semiconductors such as its market-dominating central processing units are cut. The new plant in Kirvat Gat, Israel, will operate on 45-nanometer process technology, a transistor standard that will underlie chips coming out starting in 2007.

When completed, Fab 28 will become Intel's seventh 300-millimeter wafer facility, and the second using the 45-nanometer standard. The company currently plans to expand another 300-millimeter fab in Ireland starting in the first quarter of next year. In July, Intel announced plans to invest more than $3 billion to build another 300mm fab, Fab 32, in Chandler, Ariz.

An Intel spokesman told the Associated Press that the company got a $525 million grant for he project from the Israeli government. The Israel plant would be the company's first to be built from scratch in more than a decade.