Israel gives Intel ultimatum on fab grant

1/25/2012 7:41 AM EST

The human cost factor is important to compete in the future and stand as one of the market leader. So US,UK centered may be a second choice to Intel.

1/25/2012 8:26 AM EST

I cannot understand why would Intel build a state-of-the-art Fab in Israel? That part of the world is very unstable. Ireland or indeed the UK (given Ireland's Euro uncertainties) would be much better choice.

1/25/2012 11:18 PM EST

As an Israeli, I take umbrage at that. Israel is not at all unstable. have you ever been? In fact, it's the tech haven of the middle east with some of the world's brightest engineers. The Technion, known to be one of the best engineering universities in the world (and sistered with MIT) is in Haifa and has produced some of the best tech execs today. Also, Israel's GDP growth is astounding, our currency is far more stable than Europe's (or the US' for that matter), and our workforce is skilled, and cheap. So.... what was your objection again?

1/25/2012 11:50 PM EST

I think both of you are looking at the same coin, but from two different sides. Yes, internally Israel is quite stable. The technology sector in particular is THRIVING and is amazing given the country's size. Technion is by all accounts a top-notch institution in some disciplines. However, all it takes to ruin this stability is one serious rift with Iran, or Egypt deciding that it does not want to play nice with Israel any more (not in terms of war, but in terms of economic cooperation and simply allowing goods to flow in/out of Israel). Let's say that Israel decides to bomb Iran's nuclear facilities. WWID (What Would Iran Do?). Probably lob a conventional missile back. Where do you lob it to cause maximum damage? Not Jerusalem, but how about a technology center. Yes, Israel is relatively stable relatively democratic thriving economy TODAY. The problem is that noone really knows that this will be the case 5-10 years from now. Nobody is going to lob a missile at Ireland 10 years from now. And with the depressed economy there is a lot of leverage.

As to why Intel builds fabs in Israel... think about Andy Grove's ethnicity. This was probably a personal thing for him that also kind of made sense.

1/26/2012 12:03 AM EST

Terror can strike anywhere... Even in the US. Or India. Or Indonesia. Then there are places where natural disasters are a concern... like Japan, or Thailand.... No where is "safe" if you look at all the risks... but Intel has suffered no disruption in Israel since it started operating there. Not natural or otherwise...
that's my point. I get fed up of people being hysterical about life in Israel. I lived there most of my life, and I'm perfectly ok... no trauma! :)

1/27/2012 5:04 PM EST

Hi Sylvie,

No, I have never been to Israel, but let's not kid ourselves, it is a country surrounded by enemies, and while the situation is stable right now, it could turn nasty at any moment. I sympathise with your enthusiasm towards your country of origin but to me, as an outsider, looking at El Al's check-in desks at some European airports alone does not really give much of a confidence to visit the country let alone commit large sums of money to it! The check-in desks are indeed often guarded by special security forces unlike many other airlines.

1/29/2012 12:42 PM EST

Hi KBXXXX,

When was the last time you've tried to get to the US and pass the sucurity checks at the airport? taking off your shoes, belt, physical checks etc. So security is NOT something typical just for those travelling to Israel.

1/31/2012 7:56 AM EST

Yes indeed, KB, enemies in every direction, and as for the economic strength of Ireland, I suspect it would be far stronger, if, like Israel, it too had 3 billion US$, tax free, delivered yearly, and 30 billion US$ in defense 'deals'. The economics of free money are very compelling.

1/25/2012 10:20 AM EST

Hi any1, would you like to elaborate on these factors? and tell us how could Israel be a viable place for Intel's fab?

1/25/2012 4:56 PM EST

well.. why not... they have a very good experience in israel.,., those guys meet all the expectations from them , brign LOT of added value in creativity, commitments, innovations and did DELIVER ... right ?

1/27/2012 5:09 PM EST

The Middle East is constantly on a powder keg. Why would Intel commit billions of dollars to that region while it can perfectly do it somewhere else? Somewhere that is much more stable, with access to a larger pool of talent, and perhaps even more Government help? As I said above, Ireland or the UK make a better choice to me.

1/25/2012 7:48 PM EST

As the article says, Intel has been in Israel since '64 and they have a solid source of engineering talent there to run the factories. Most of Intel's fabs are already in the US -- Oregon, Arizona, New Mexico. And they're building 2 new fabs here right now.

1/25/2012 11:21 PM EST

Since when is the Gallilee a war zone?? Israel is not at war...
The US is at war though... officially.

1/25/2012 11:59 PM EST

Sylvie, I understand the need to defend the homeland against unfounded generalizations (e.g., Israel being a war zone), but let's not kid ourselves. No diplomatic relations with Syria for decades and no official end the the Six Day War. The Golan Heights? Plus, categorizing the situation in Gaza as anything but a constant state of war is avoiding an inconvenient truth. The distance from Gallilee to he Golan Heights is less than most Americans drive to work one way, so defending Gallilee unconditionally does not stand up to logical analysis. Yes, Israel proper is not a war zone in the strict sense of the word. But it is pretty damn close to a war zone in the strict sense of the word.

1/26/2012 12:05 AM EST

well, I certainly wouldn't recommend building a fab in Gaza! But that's Palestine... not Israel :)

And while it's true that there was no official end to the 6 day war, and no peace with Syria, it's still, ironically, our quietest front!

1/26/2012 12:22 AM EST

Speaking of the situation in the region:
http://www.nytimes.com/2012/01/29/magazine/will-israel-attack-iran.html

1/25/2012 11:23 PM EST

Hardly. Israel has been important to Intel for a long time and both Dadi and Mooly are products of Intel Israel (and the Technion) rather than drivers of it. And do you really think Intel makes multi billion dollar decisions based on the whims of its Israeli execs? you don't give Intel much credit, do you??

1/26/2012 12:02 AM EST

Very valid point. The Israeli design center saved Intel's bacon during he P4 fiasco and has been an essential component in Intel's design efforts ever since. However, that is quite separate and orthogonal to the fab side.

1/27/2012 5:18 PM EST

I agree. If it were a design centre, I would say it makes perfect sense. As Sylvie said above, Israeli colleges are on a par with the best in the world and it makes prefect sense to tap into that talent, but to commit to building a multi-billion dollar fab within the range of the likes of Hezbollah's rockets does not make sense to me.

1/25/2012 7:44 PM EST

Intel is already building new multi-billion plants in Oregon, Arizona and New Mexico. Haven't you been paying attention ? Most of their fabs are here. They have more employees in Oregon (18,000) then anywhere else in the world. But they're a global corporation with most of their sales now outside of the US. One of the things Intel has been concerned about is a shortage of engineers in the US. You need a lot to run high tech factories. Israel has a good source as well.

1/26/2012 12:04 AM EST

Israel is I believe an Andy Grove legacy, not a political decision. China on the other hand...

2/7/2012 5:58 AM EST

Absolutely. What I can't understand is how come the US is disadvantaged when it comes to the talent pipeline as some posts above imply? The same applies to the UK/Ireland, home to some of the world's top Universities with a large supply of top-notch graduates.