Intel to build $3.5 billion chip plant in Israel

Intel will immediately begin construction of a $3.5 billion advanced semiconductor manufacturing facility in Kiryat Gat, Israel, the company announced Thursday.

Called Fab 28, the plant will be Intel’s seventh facility worldwide capable of producing 300-millimeter silicon wafers, from which its microprocessors are cut. Intel currently has five 300mm chip plants in the U.S. and a sixth in Ireland.

Making chips from 300mm wafers, compared to the more commonly-used 200mm wafers, uses 40 percent less energy and water per chip and reduces Intel’s manufacturing costs, the company said.

The fab will have 200,000 square feet of “clean room” space and will be the first plant to put Intel’s 45-nanometer manufacturing technology into high-volume production by the second half of 2008, the company said.

The 45nm process allows chip circuits to be created that are half the size of those made with the 90nm technology used today, Intel said. The figures refer to the size of circuits etched onto the surface of chips.

The facility will create 2,000 Intel jobs over the next several years, and the Israeli government provided financial incentives for the facility, Intel said.

In July, Intel announced plans to invest more than $3 billion to build a second plant in Chandler, Arizona, called Fab 32. The company is also expanding its Ireland plant in the first quarter of next year, it said.