The Kiryat Gat municipality has requested changes to the District Outline Plan just after it was approved, in order to facilitate future expansion of Intel's fabs in the city. The requested changes, which were ultimately approved by the National Planning and Building Council last month, reduced the required allocation of open spaces in Kiryat Gat in order to allow the city's industrial zone, in which Intel's fabs are situated, to be expanded.
The giant US chip maker currently has one operational fab in Kiryat Gat (Fab 28), and is in the process of constructing another (Fab 38) at an investment of $10 billion. In the light of the global chip shortage, however, Intel is looking for places to construct more fabs, and Israel is one option under consideration, according to information presented by Intel Israel representatives and the planning authorities at the hearing last month before the National Subcommittee on Planning Matters of Principle. Although the requested changes to the District Outline Plan were approved, there is no certainty that Intel will in fact decide to build an additional fab, which will be its third in Israel if it does.
"We must be attractive to Intel"
In January 2021, the National Planning and Building Council, Israel's supreme planning body, published for public comment an update to the District Outline Plan for the Kiryat Gat area. The National Subcommittee on Planning Matters of Principle finished dealing with objections to the plan only in January this year. Then, a week after the process ended, the Kiryat Gat city engineer wrote to the Southern District Planning and Building Committee requesting a further discussion of the plan in order to enable the city's industrial zone to be expanded to the south, allowing for future expansion of Intel's fabs. The District Committee chairperson wrote to the National Subcommittee on Planning Matters of Principle, which held a further discussion of the matter last month.
Allowing for future expansion of the Intel fabs meant reducing the open spaces in the outline plan in a way that upsets the balance between them and the built-up space, and impinging on the urban fabric of Kiryat Gat. Two Intel representatives appeared before the committee: David Hadad, who is Corporate Services Site Factory Operational Manager at Intel Israel, and Miryam Weinstein, an architect in charge of infrastructure licensing at the company.
Hadad spoke of the drive by Intel to construct fabs, arising from the global chip shortage, and from Intel Inc. CEO Pat Gelsinger's plans to turn the company into a powerhouse foundry, producing chips to order for external developers, in contrast to Intel's classic model of manufacturing chips of its own design. In its foundry business, Intel seeks to compete with market leader TSMC of Taiwan, and to that end it needs more fabs.
In the US, Intel is building two fabs in Arizona at an investment of $20 billion, and fabs in Ohio the investment in which could reach $100 billion. At the same time, Intel plans to invest at least $19 billion in a fab in Germany, and it is in negotiations on investment in Italy, as part of its push to increase its presence in Europe.
"Basically, for the first time in 40 years Intel is expanding to additional sites, and we must show that we continue to be relevant, and allow Intel to expand within a short time, because this revolution is just beginning," Hadad told the committee. According to Weinstein, in order for Israel to be attractive to Intel, it has to be able to provide land for no fewer than four fabs, amounting to 1,300 dunams (325 acres). "Israel will be an attractive site if we can demonstrate the ability to build at least four fabs. Any less than that, and other places become more attractive, and as has been said even Intel is not a Zionist company," she said.
Kiryat Gat mayor Aviram Dahari backs Intel totally. Dahari is not concerned at the idea of reducing the amount of open space called for in the outline plan. "I always say that Kiryat Gat is 16,000 dunams bathed in a million dunams of green, so another 1,000 dunams less is not the issue here," Dahari says. He proposes compensating for the loss of open space cut from the plan in other areas in the west of the city.
"This is precious time that we mustn't lose," he says. "The normal rules are good for normal times. Now we're in a war, a war over who will lead global developments… we're working with Intel, and they want a year before the board in the US gives them approval."
"Will we dismantle national planning for every factory?"
The representative of the Jewish National Fund (JNF) opposed changing the outline plan for Intel's sake. He referred to alternatives for enabling Intel to expand without that coming at the expense of open areas, such as by reducing the amount of land available for sale by the Israel Land Authority. "It's always simplest to exploit open land," he said.
Other objections were raised by environmental organizations. "I don’t know what Intel's contribution is in comparison with other enterprises," their representative said. "Will I dismantle all the national planning for every factory that comes along, and say we don't need forests and open areas because here's a factory that provides jobs? This is not a consideration that supersedes every other planning consideration."
Despite the objections, as mentioned the committee approved the requested change.
Published by Globes, Israel business news - en.globes.co.il - on April 27, 2022.
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