U.S. chipmaker Intel will invest $2.7 billion over the next two years upgrading its chip plant in southern Israel to produce 22 nanometer technology.

The amount includes a 740 million shekel ($210 million) grant recently approved by the Israeli government.

We are already in preparation for hiring, Maxine Fassberg, general manager of Intel Israel, told a news conference. We are scheduled to start production in December.

Fassberg said the Israeli plant in Kiryat Gat will be Intel's second worldwide to produce the smaller 22 nanometer chips.

Intel Israel, which employs 7,057 people, will hire 1,000 people over the coming year.

There are no plans to build a new plant (in Israel), Fassberg said.

(Reporting by Tova Cohen; Editing by Dan Lalor)

($1 = 3.53 shekels)