US chipmaking giant Intel breaks into Israel

US chipmaking giant Intel broke new ground today with the announcement of a planned new US$4 billion ($6.1 billion) plant in the southern Israeli city of Kiryat Gat, according to an Associated Press (AP) report.

The Israeli government contributed US$525 million to the plant, which is to produce 45-nanometer semiconductor chips. Intel's investment is the largest by an industrial corporation has ever made in Israel.

At the groundbreaking ceremony, acting Israeli Prime Minister Ehud Olmert said there were political aspects to the event, following the election victory by the violent Islamic Hamas, which is setting up a new Palestinian government.

Olmert said that the huge Intel investment showed that "Hamas does not frighten it, terror does not frighten it, it has faith in the state of Israel, it has faith in the stability of Israel's economy", AP reported.

The new plant, scheduled to open in 2008, upgrades Intel's existing facility in Kiryat Gat and will create about 4400 jobs, said Bob Baker, a senior vice president at Intel's technology and manufacturing group.

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