Intel Corporation, which employs some 4,400 people in the Republic, has recalled its latest pentium III chip after it was discovered it could fail under a certain set of circumstances.

None of the chips, which were introduced in late July, were manufactured at the firm's semiconductor facility at Leixlip but some of Intel's Irish customers may have been affected by the recall.

An Intel Ireland spokesman said only a small number of the new pentium 1.13 giga-hertz chips - which are targeted at a niche market which uses computers running very taxing applications - had been produced worldwide.

The company could not confirm if any of its Irish customers had purchased the new chip but the spokesman said he didn't expect significant recalls in the Republic.

Two of Ireland's largest computer manufacturers, Compaq and Dell, confirmed they had been informed of the difficulties with the chip but both said none of their products made in the Republic had been affected.

Intel Ireland said the problems with the new chip were "marginal" and related to the speed with which the chip worked under a certain set of circumstances such as voltage and temperature.

An Intel spokesman said he could not disclose how many chips had been shipped since its launch but it said the recall would have no material effect on profitability or the proposed $2 billion expansion of its facility in Leixlip. He said the defect with the chip would probably be fixed within eight to 10 weeks.

It is thought that the faulty chips were produced at one of three factories in either the US or Israel.