Updates to this story
Intel is to invest $2.7 billion in Israel to upgrade its chip plant over the next two years, marking another investment by the chip giant in strategic locations around the world.
The upgraded plant will be in Kiryat Gat in the Southern District of Israel and will produce 22nm technology, according to the Economic Times.
Intel Israel's general manager, Maxine Fassberg, said that the plant will be only the second in the world to produce the 22 nanometer chips for Intel, making it a vital facility for future developments, including the Ivy Bridge chips expected later this year.
The $2.7 billion figure includes a grant by the Israeli government to the value of 740 million shekels ($210 million), which may have helped swing Intel's decision. The two have a close relationship.
This will be welcomed by many Israelis. Intel is a huge employer in the country, with over 7,000 employees to date. The company will hire an additional 1,000 people over the next year, with Fassberg reckoning that Intel is already preparing to take on new staff.
The upgrades to the Israeli plant are expected to complete within 2011, with 22 nanometer chip production slated for December of this year.
The news follows an investment of $500 million in the Leixlip chip plant in Ireland announced over the weekend. Intel Ireland told TechEye yesterday that it is planning to upgrade its facilities there from the older 90 nanometer and 65 nanometer technologies.