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MAY 2006

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The Other Environment

   Environmental factors are one thing; business environment for major investment is another. Certain state tax incentives are being scrutinized right now by the Supreme Court, while in Europe the European Union's attempts to rein in Ireland's incentives scheme have directly affected Intel, putting a major expansion at Leixlip on the back burner because of the EU's refusal to allow $120 million in incentives for the project.
   Asked how Intel assesses incentives offers among countries and states, and whether he thinks the competitiveness between territories for projects such as Intel's contributes to or detracts from their economic
Intel fab in the city of Kiryat Gat, Israel
The new Intel fab in the city of Kiryat Gat, Israel, is one of a series of recent high-tech projects in the nation, including facilities from Google, Siemens, Sun Microsystems and Applied Materials.
competitiveness on the global stage, Leising says, "As a general rule, Intel applies for all applicable incentive programs seeking to eliminate the disproportionate impacts on capital intensive industry and to reduce overall project cost. We expect that all programs in which Intel participates will be sound economic programs that make sense for all parties, including similarly situated investors and the communities in which we locate our investments. At a higher level it is critically important for all states and countries to understand the global nature of the semiconductor industry and the importance of providing an environment that is conducive to large scale investment and the subsequent positive economic impacts."
   To that end Leising says Intel applauds the positive energy currently behind Pres. Bush's American Competitiveness Agenda and the similar PACE (Protecting America's Competitive Edge) bills in the U.S. Senate: "We urge government leaders to take immediate bipartisan action to ensure U.S. innovation leadership, including a renewed emphasis on math and science education, additional investment in basic research and incentives for business investment in innovation that creates new jobs," he says.
   The PACE Act would put into action 20 recommendations contained in a recent report by the National Academy of Science titled "Rising Above the Gathering Storm." The American Competitiveness Initiative announced in the President's State of the Union commits $5.9 billion in FY2007, and more than $137 billion over 10 years to programs that help America retain its leading edge in science, math and technology. The ACI will increase investments in research and development, education, and tax incentives to encourage innovation.
   "I am particularly impressed that, after years of flat funding, the Administration proposes to double funding over the next decade for DOE's Office of Science," said Sen. Pete Domenici, R-N.M., in February 2006. "I am pleased the Administration is also increasing funding for the National Science Foundation and the National Institute for Standards and Technology. These three agencies must thrive if we are to remain global leaders in technology and innovation."

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