By Ora Coren

Intel submitted a $4 billion expansion plan to the Investment Center of the Industry and Trade Ministry yesterday.

The plan includes establishing a new chip-manufacturing facility based on state-of-the art technology not yet used in Israel.

Intel emphasized that the plan it submitted represents a statement of intentions. It places Israel well in Intel's strategic development plans, but it does not signify a final decision to go ahead with the project.

The final decision will based on business conditions in the market as well as manufacturing requirements.

Intel's plan indicates the chipmaker's real strategic interest in continuing to invest in Israel, according to Ehud Kaplan, Intel's director of strategic development.

The proposal submitted yesterday is not part of Intel's plans to invest some $7.5 billion in R&D and production this year, Kaplan said.

Thus, unless there is a dramatic change in world markets, it would not begin to be implemented in 2001. He added that it is still uncertain when the world market for Intel's products will pick up again.

Intel was required to submit its proposal by May 2 in order to qualify for government benefits, including a grant of 12.5% on an investment of $1 billion to $3.6 billion over 11 years from the start of construction on the new factory.

Investments exceeding $3.6 billion would be rewarded with tax benefits, according to the understandings worked out between the government and Intel. Intel would have two years to begin construction of the new facility, starting from the date of its approval by the government.