Sources at Intel Israel claim that the company's Fab 8 facility in Jerusalem is to be closed down and that its flash memory operations -- including the Fab 18 facility in Kiryat Gat -- are going to be sold.
The buyer, say the sources, is the French-Italian chip design and manufacturing company ST Microelectronics.
The move might be part of a wider global drive by Intel to scale back its flash memory operations.
Intel Israel's spokesman refused to comment for this report. A spokeswoman for STMicro in the UK also refused to comment on what she called "rumors."
Industry sources predict that a formal announcement will be made shortly.
The preparations for sale include an official offer to the Fab 18 workers to undergo further training abroad, in order to take part in the new Intel plant built in Kiryat Gat, Fab 28.
STMicro is a leading maker of chips and memory components. It operates out of plants in Europe, the U.S. and Asia. It was founded in 1987 by the merger of ST Microelettronica of Italy and Thomson Semiconducteurs of France. Today its declared turnover is $10 billion a year and it has 50,000 workers around the world.
STMicro has become one of the world's three biggest makers of NOR flash memory technology. Analysts speculate that, meanwhile, Intel's own NOR manufacturing has been losing money hand over fist for years.