Posted on November 10, 2002

Chip giant Intel's Kirya Gat plant could become one of the first in the world to manufacture using the future 0.09 micron technology. This is two generations more advanced than the three-year-old fab's present manufacturing capability. In order to make the change, Intel would have to invest hundreds of millions of dollars to upgrade the plant.

Alternatively, the company could consider the $4 billion construction of a new factory alongside the existing facility.

The Knesset Finance Committee has approved a NIS 2 billion grant for Intel, should the company decide to build a new factory.

Intel Israel president Alex Kornhauser confirmed the Kiryat Gat plant is competing inside Intel to manufacture the company's next generation chips. According to Kornhauser, who also manages the Kiryat Gat fab, almost all of Intel's plants worldwide are competing in the internal tender.

The Kiryat Gat plant is considered one of the company's most successful and Intel Israel has won every internal tender in which it competed. The fab's chances in the tender are therefore considered good.

Intel first began manufacturing at the Kiryat Gat factory, which specializes in Pentium 4 processors on 0.18 micron technology, in the third quarter of 1999. The technology is no longer Intel's fastest, however, as the plant uses a 0.18 micron conductor to connect the transistors to the processors, while the company's newest conductors are just 0.13 micron.

After extensive research in recent months, the Kiryat Gat plant decided not to upgrade to the 0.13 micron technology, but to focus on the next generation manufacturing technology, 0.09 micron. Intel has no fabs using this technology.

Various reports indicate that the Pentium 4 successor - the Prescott processor, slated for a mid-2003 launch - will be manufactured using the new technology. The next generation of chips for the cellular telephone industry, being developed by Intel in Petah Tikva, will also be manufactured using the 0.09 micron technology.

According to Kornhauser, the grant approval allows the parent Intel to decide if it wants to construct a new factory in Israel or upgrade the existing one.

"We requested a grant in the event Intel decides to build a new factory, but it is not implausible that we will later ask for a grant to upgrade the existing factory, should Intel opt for that route," he said.

Kornhauser refused to comment on the date of Intel's decision.

According to Kornhauser, until the decision is made, the Kiryat Gat factory will continue to make Pentium 4 processors, chip sets and products for the portable computer market.

_{Click here to view the full report at Ha'aretz Daily}

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