Intel is still betting big on Ireland with the company’s €17 billion Leixlip plant seen as “critical” to reversing the slide in the once-dominant chipmaker’s fortunes, according to sources close to the company.
The company’s Irish operation, its biggest outside the US, is in the medium term likely to produce the majority of its new cutting-edge EUV (extreme ultraviolet) chips which the company sees as the route back to profitability, the sources said.
However, they also highlighted that the relatively high cost of electricity in Ireland was becoming a major challenge for the tech giant because of its intensive manufacturing processes.
Intel endured an annus horribilis in 2024, posting a record $16.6 billion (€16 billion) quarterly loss in October before being ousted from the Dow Jones index by rival Nvidia.
The period was capped off with the departure of former chief executive Pat Gelsinger in December after what insiders described as a troubled tenure in charge.
Intel has been struggling in the face of increased competition, a series of production delays and a failure to generate sufficient contract business. Unlike chip designers Nvidia and AMD, the company not only develops but manufactures semiconductors.
Intel is now implementing a $10 billion cost-cutting programme to reverse its recent decline which involves the laying off of up to 15 per cent of its global workforce.
Sources said cutbacks in Ireland had, in the main, been implemented in the third quarter of last year but declined to specify how many staff here were let go. A previous round of cost-cutting resulted in the loss of 130 jobs in the Republic in 2023.
Intel is one of the State’s biggest employers, employing 4,900 staff mainly at its Leixlip plant, which includes its new Fab 34 chipmaking facility.
The purchase of high-volume EUV machines for the plant, which are theoretically precise enough to hit a person’s thumb with a laser pointer from the moon, should be seen as “a huge vote of confidence” in the Irish operation, the company sources said.
While there were no further cutbacks planned for Ireland, they said the semiconductor industry demanded constant improvements in competitiveness. “In Ireland, the electricity-related contribution (to costs) is much higher than in other jurisdictions,” they said.
“That’s the biggest challenge in terms of cost coming out of Ireland,” they said. IDA Ireland gave Intel €30 million in 2023 as part of an aid package to compensate companies whose energy bills spiked after Russia’s invasion of Ukraine.
On the prospect of US tariffs, the sources said they had the potential to damage vital supply chains in the semiconductor industry which made Intel’s own foundry business that bit more important. While a replacement for Gelsinger, who left in December, was imminent they could not say when it would be announced.
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