KIRYAT GAT, Israel (AP) _ Intel Corp. inaugurated its newest microprocessor plant Monday in the southern town of Kiryat Gat.

Intel President Craig Barrett said he expects the factory to produce $1 billion worth of components a year beginning in 2000.

The plant will make the world's thinnest microchips for processors and Internet applications, company officials said.

Intel will employ 1,500 full-time workers at the plant. That could double in time, the officials said.

Production is scheduled to begin in August, with the first microchips coming off the assembly line in September.

Construction of the factory began in 1996. Intel invested $1 billion, and the Israeli government put up some $600 million.

The government's agreement to finance so much of the plant's construction generated controversy in Israel. Critics said the Ministry of Industry and Trade grant money should have gone to companies with less money than Intel has.

Intel also has a research and development center in Haifa and a smaller production center in Jerusalem.