In a rush visit to Israel, Intel President and CEO Paul Otellini reassured that a long-term relationship means the company will continue to invest in the country. That isn’t a sign of disengagement of the company’s efforts in Israel, he said.
In a surprise move at the end of May, Intel sold part of a fab in Kiryat Gat to STMicroelectronics NV and private equity fund Francisco Partners. Otellini tried to elaborate on the sale in Thursday morning meetings with company officials and Israel’s Prime Minister Ehud Olmert.
Otellini brought Olmert up to speed and clarified that Intel views its relationship with Israel as being for the long term. Intel means to continue investing in Israel, he said.
Intel’s latest developments had been based on technologies developed at the labs of Intel Haifa, the Intel chief noted, further underscoring the company’s commitment to Israel.
To recap, Intel stated that it will be transferring its NOR flash memories division to a joint company with STMicroelectronics and Francisco Partners. In exchange it will receive 45.1 percent of the ownership of the joint company and US$432 million in cash.
STMicroelectronics will get 48.6 percent of the company and $468 million cash. Francisco Partners, based in California, will be investing $150 million in cash for 6.3 percent of the company’s shares.
Intel’s Kiryat Gat fab is part of the NOR memory division that is changing ownership.
Intel at the said time the move would not involve layoffs. But industry sources fretted that any reorganization of that magnitude involves dismissals.
In recent months Intel Israel took arrows for shutting down its manufacturing facility in Jerusalem, though it’s keeping its development operations there. Intel Israel retorted that no workers were being fired.