KIRYAT GAT, Israel — Intel Corp. used a ground-breaking ceremony here to promote its Israeli activities. The chip maker said it exported $1.19 billion from Israel in 2005, up 1.8 percent from 2004. The total represents 14 percent of Israel's high-tech exports.

The Israeli government will contributed $525 million toward construction of Intel's new plant, which will produce 45-nm chips. Intel's investment is the largest ever by an industrial corporation in Israel. The new plant is scheduled to open in 2008. It will upgrade Intel's existing facility here, and will create about 4,400 jobs.

Intel Chairman Craig Barret said the company now has more employees in Israel than in Silicon Valley. Intel established its first overseas development center in Haifa in 1974. It also has manufacturing, research and sales facilities in Jerusalem and in central and northern Israel, employing a total of 6,700 people at six locations.

Meanwhile, Google has also set up its first Middle East R&D center in Haifa. The development center will be run by Yoelle Maarek, a 17-year veteran of IBM Research, where she most recently served as senior manager of the information and media technologies department.

Google currently has overseas R&D operations in Tokyo, Zurich and Bangalore, India. The Google Israel R&D center will be the first of its kind in the Middle East.