Intel Corporation (Nasdaq: INTC) and the government have made progress in their negotiations for a $405 million grant for the company to build a new wing for its Fab 28 in Kiryat Gat. The Ministry of Industry, Trade and Labor received a study by Tavor Economic Consultants Ltd. report on the feasibility of the grant to Intel. Tavor supports the grant.
Tavor said, "Intel has demonstrated economic soundness and met its guidance over the past decade. The economic effect of Intel is extensive as is its contribution to the state budget and national income derived from the upgrade of Fab 28. The upgrade will strengthen the effect of the fab's activity and the jobs it creates. We therefore recommend that the investment is worthwhile for both the company and the country."
Intel paid Tavor NIS 300,000 for the study.
The Ministry of Industry said in response that there was nothing unusual in Intel financing such a study. "Every company seeking a government grant must pay for a study."
Intel plans to build a new wing for its Fab 28 at an investment of $2.7 billion. The company is seeking government financing for 15% of the cost, in exchange for guaranteeing 400 new jobs. In other words, the company is seeking a grant of about $1 million per job. Intel's previous grant amounted to about $250,000 per job; the current grant amounts to four times as much.
Published by Globes [online], Israel business news - www.globes-online.com - on July 4, 2010
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